British entrepreneur Richard Branson is poised to break into South Africa's mobile phone market with his Virgin brand via a joint venture with the country's third-ranked operator Cell C.

Top Cell C executive Jonathan Newman, who is running the deal for the unlisted company, told Reuters the two firms would set up a 50/50 joint venture to market Cell C services under Branson's Virgin airlines-to-mobile phone brand.

"Talks are progressing well," Newman said. "Virgin is perceived as a premium brand here so it will complement Cell C well."

Branson has already set up British, US, Canadian and Australian mobile phone businesses, focusing mainly on teenagers and young adults. But Newman said that in South Africa the brand had a more upmarket appeal, thanks to Virgin's chain of gyms in swanky suburbs.

He declined to say when the deal would be signed, but industry sources have said the brand could be launched within months.

Cell C, which lags rivals Vodacom and MTN with just 12% of the market, targets middle earners and the young, but reckons Virgin will coax some of the bigger spenders away from its larger rivals, boosting its average revenue per user.

Branson was reported as saying that the cost of making a phone call in South Africa was "exorbitant" and he intended to do something about it.