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Virgin partners with Tata for India mobile entry

Virgin Group chairman Richard Branson announced Sunday the launch of Virgin Mobile in India through a partnership with Tata Teleservices.

"Tata has got the network, we have got the brand…it makes a win-win for both companies," said Branson, as reported by India's Economic Times.

However, Virgin and Tata both insisted the agreement will not see Virgin Mobile operate as a mobile virtual network operator (MVNO), which is not permitted in India.

Instead, Tata will sell Virgin-branded mobile services as part of a revenue-share agreement.

"This is not an MVNO agreement between Virgin and Tata Teleservices," said Anil Sardana, managing director of Tata Teleservices.

"Virgin Mobile is just another brand that the company would offer, it is us who will invest in infrastructure and get regulatory approvals and operate as a network service provider. Virgin on its part would just lend its brand and the value-added services (VAS) that come with it to us," he commented.

However, both companies declined to disclose the exact details of their revenue-sharing agreement.

Virgin Mobile's Indian operation will be targeted at the youth market, offering music and game downloads to appeal to a younger demographic.

It has set a target of attracting 5 million customers in the first three years.

"India is an exciting market. There are more than 215 million Indians aged between 14 and 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 350 billion rupees (€5.75 billion)," said Branson.

Branson revealed last November that Virgin Mobile had found a telecoms partner for its Indian venture, although the regulation of foreign ownership of Indian businesses proved to be a source of frustration for the entrepreneur.

Tata offers mobile services across India through its Tata Indicom brand which according to the Economic Times serves 22.5 million customers, representing a 9.3% market share.

"It's the size of the market that is attracting so many foreign companies to India… The growth is going to be here in the coming years, compared with the U.K. and the U.S. where it has plateaued," said Harit Shah, an analyst at Angel Broking in Mumbai, to the Hindustan Times Sunday.

According to the Telecom Regulatory Authority of India (TRAI), the country added a total of 8.17 million mobile subscribers in January, bringing the total user base up to 242.4 million.

Tata's services are CDMA-based, however Branson said he is keen on entering the GSM sector as well.

"It's a pain to do GSM at the moment because the network is completely full," he said.

"In another nine months, when the new GSM players start rolling out their services, we would look to offer similar services on GSM as well," he added.

However, Branson will have to wait for India's final decision on how best to distribute additional GSM spectrum.

Delhi's High Court in January delayed ruling on an ongoing spat between the country's CDMA and GSM providers over which operators should be entitled to receive extra chunks of 2G GSM bandwidth.

The row was sparked off specifically by the government's decision last October to allow CDMA operators to apply for GSM spectrum.

The move is opposed by GSM industry body the Cellular Operators Association of India (COAI), which is driven by the country's biggest GSM operators such as Bharti Airtel, Vodafone Essar and Idea Cellular.

Источник: Total Telecom

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