Virgin Mobile ties up with Tata to enter telecom space

Sir Richard Branson’s Virgin Group on Sunday entered the Indian telecom market by inking a ‘brand franchise’ agreement with Tata Teleservices...

Sir Richard Branson’s Virgin Group on Sunday entered the Indian telecom market by inking a ‘brand franchise’ agreement with Tata Teleservices (TTSL). Branson’s group will now provide value-added services to Tata while aiming at the youth.

Last week, Cellular Operators Association of India wrote a letter to the Department of Telesommunications (DoT) asking whether the Virgin-Tata tie-up had been granted permission to offer Mobile Virtual Network Operator (MVNO) services. Virgin is primarily known for offering MVNO services in the UK.

Announcing the launch here Branson said in three years the

company would target to rope in five million subscribers in the youth segment and to reach break even. He, however, did not mention the investment company is putting in. “India is an exciting market. There are more than 215 million Indians aged between 14-25 years. Over the next three years, we expect this segment to be adding over 50 million new youth subscribers and to have revenues of over Rs 350 billion. We will target 10 per cent of the urban youth market,” Branson said.

Story continues below this ad

The UK-based company, said, would bring in ‘10 telecom industry firsts’ to the Indian telecom market which includes getting payment for receiving calls, one-touch VAS access from every Virgin Mobile-branded market and ‘call more for less’ among others’.

Virgin’s entry into the telecom sector faced rough weather as the GSM players lobby Cellular Operators Association of India had shot a letter recently to the Department of Telecom seeking its view on whether MVNO was allowed in the country. Virgin acts as an MVNO in all its existing six markets in the world.

“The deal is aimed at just bringing value-added branded services to India’s youth and nothing beyond this. We are not going to sell spectrum to Virgin. It is not a MVNO service,” Tata Teleservices’ managing director Anil Sardana said. Virgin will be launching the service with six colour handsets, prices of which are ranging between Rs 2,000 to Rs 5,000. Initially, customers will be able to access Virgin Mobile branded products and services in 50 cities across 17 telecom circles.