Sir Richard Branson on Sunday launched the Virgin Mobile brand in India through a franchise arrangement with Tata Teleservices.
TTSL, which is the second largest CDMA operator with 22 million customers, will sell the youth-based mobile service under the brand name of Virgin Mobile.
The financial arrangements between the two companies were not disclosed, but an official said TTSL would be paying Virgin what would be in the nature of a royalty fee.
Virgin will not be entering India as a Mobile Virtual Network Operator (MVNO), as feared by some of the existing telecom operators, said Mr Anil Kumar Sardanah, Managing Director, TTSL, at a news conference here.
An MVNO is an operator that does not own infrastructure, network or spectrum but leases these to offer services. Virgin operates as an MVNO in all its global markets. At the news of Virgin launching in India, the Cellular Operators Association of India had written a letter of complaint to the telecom authorities.
This is Virgin’s seventh launch globally and its largest investment to date in India, said Sir Richard, noting that the Indian market was very attractive, growing like none other in the world.
The Virgin group and TTSL have also jointly established a company ‘Virgin Mobile India Ltd’ to develop the new branded service. The investment details of this company were not disclosed either.
The Virgin youth service aims to acquire 5 million subscribers over the next three years, during which period it will become profitable too, Sir Richard said.
“The estimated population in India of people between 15 and 30 years is 400 million, almost six times the whole of the UK population; and these numbers promise to be a lot of fun,” Sir Richard said.
Mr Jamie Heywood, Deputy CEO, Virgin Mobile India, said there were 215 million Indians aged 14-25 and over the next three years there would be 50 million additionally. In all, revenues from this segment then would be over Rs 35,000 crore, he said.
To begin with, Virgin Mobile will be launched in 50 cities, and in a year’s time in over 1,000 cities. Specially designed handsets in the Rs 2,000-5,000 range would be offered by TTSL, but customers are free to buy CDMA handsets separately, since Virgin would be offering a SIM-card based CDMA service, the first such offer in India, said Mr Heywood.
More Media Snaps:
Virgin Mobile picks CDMA once again
This time it's in India
NOW THAT Vodafone has shown the way, Virgin Mobile is heading towards Indian shores with a joint venture formed with Tata TeleServices (TTSL).
Like the joint venture Virgin operates with Sprint in the USA and Bell Mobility in Canada, Tata runs a CDMA not GSM network.
Typically for Sir Richard Branson, the new Virgin Mobile India will be targeted at the youth market. That will leave Tata's existing Indicom brand as aiming at the mass market.
According to reports, a standard MVNO (Mobile Virtual Network Operator) setup in Indian isn't currently legal - although the local telecoms watchdog (TRAI) has recommended that they should be allowed.
So that leaves Virgin Mobile acting as an agent for TTSL. Since TTSL is a CDMA2000 1X network, that means Virgin will have to offer its services over CDMA handsets. Good news for Qualcomm.
TTSL has a customerbase of over 2.68 million, but along with its subsidiary, Tata Teleservices (Maharashtra), it currently serves 4.58 million subscribers.
Seeing as the joint venture is 50:50 and Virgin won't be operating the network, it nicely side-steps all the hassle Vodafone had over foreign ownership of a telecoms network. µ
Although Virgin Mobile India is reportedly recruiting already, there's no mention of it on the Virgin Mobile site yet.
Virgin Mobile, part of British communications group Virgin Media, Sunday launched youth-oriented mobile services in India through telecom operator Tata Teleservices Ltd (TTL).
The deal brings a tie-up between two of world's leading business leaders - Ratan Tata of the Tata Group and Sir Richard Branson of the Virgin conglomerate.
Branson, chairman of the Virgin Group, launched the Virgin Mobile brand by flying down the façade of popular hotel in south Mumbai and unveiled its logo in mid flight.
TTL will launch Virgin Mobile in 50 cities initially and in more than 1,000 cities by the year-end, Branson told reporters during the launch.
The maverick millionaire expects to get five million subscribers over the first three years with special value-added services and handsets priced between $50-$125.
"Our aim is not to get as many subscribers as possible but we want to deliver this brand to a more distinct segment," he said.
This is Virgin Mobile's seventh launch globally, after the success of Sprint in the US and Bell Mobility in Canada, the UK, France, South Africa and Australia.
"This is Virgin's largest investment in India till now," he added, without divulging any figures.
Virgin Mobile is the world's first mobile virtual network operator (MVNO). It does not maintain its own network but enters into contracts to use the existing networks of other providers, on which it offers services under the Virgin brand.
"Since MVNOs are not yet permitted in India, our services will be offered by Tata Teleservices through a brand franchise with Virgin Group," said Jamie Heywood, deputy chief executive officer of Virgin Mobile India.
According to Heywood, there are more than 215 million Indians between the age group of 14-25 years.
"Over the next three years, we expect the segment to grow by 50 million. Keeping our strategy in minds in next three years we want to grab 10 percent of the market," Heywood told IANS.
He expects to have revenue over Rs.350 billion ($8.74 billion) in this segment in the next three years.
After the success in this network, Virgin plans to extend its services in GSM network.
At present, TTL, a pioneer in CDMA service, has a customer base of over 4.58 million.
Anil Sardana, managing director of TTL, said: "We are very excited about our association with Virgin and offer a world class experience to our youth segment."
The handsets offering will be 100 percent colour and will have a variety of value added services like the customers will get 10 paise credit for every incoming minute they receive from any network and can have unlimited access to various portals for daily charge of Rs.5.