Mumbai: Richard Branson's Virgin Group has decided to come to India, once again.
Having extended Virgin Atlantic's services to the subcontinent in 2005, the flamboyant British entrepreneur has decided to enter the Indian telecom market though a brand franchise arrangement with Tata Teleservices (TTSL). The agreement will see Virgin provide value-added services to the Tata Group Telecom Company, targeting India's youth.
Announcing the launch, Branson laid out the target of a customer base counting at five million subscribers in three years, in the youth segment, and to reach break even, saying that "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 Rs350 billion. We will target 10 per cent of the urban youth market."
Branson's company will pioneer 10 'industry – firsts' in India's telecom market, including getting paid for receiving calls, one-touch value added service (VAS) access, and a `call more for less` feature, among others.
Candidly, Branson said that ''This is Virgin's largest investment in India till now,'' without sharing any numbers.
Virgin Mobile is the world's first mobile virtual network operator (MVNO). As an MVNO, Virgin Mobile does not maintain its own network, instead entering into contracts to leverage existing networks of other providers for offering services under the Virgin brand. Recently, India's GSM mobile players lobby Cellular Operators Association of India (COAI) had written to the Department of Telecom seeking its views on whether Mobile Virtual Network Operator (MVNO) was allowed in the country. Virgin is a MVNO in all of the six markets in the world, with India being the seventh.
In India, the MVNO arrangement will be with Tata Teleservices (TTSL), a group company of India's best know conglomerate, the House of Tata. TTSL is the second largest CDMA operator in the country, with a 22 million large customer base. According to sources, under the agreement, TTSL would pay Virgin what can be termed as a royalty fee.
Jamie Heywood, Deputy CEO, Virgin Mobile India said with 215 million Indians aged between 14 and 25, and another 50 million being added to this segment over the next three year period, revenues from this segment could be estimated at Rs35,000 crore.
According to Heywood, initially Virgin Mobile will be rolled out across 50 cities, and over 1,000 cities within a year. Specially designed handsets between the price points of Rs2,000 to Rs5,000 would be offered by TTSL, though customers would be free to choose CDMA handsets separately as well. Clarifying that this would not be a handset-based service, Heywood said that Virgin would offer a SIM-card based CDMA service, the first such offer in India.