TTSL to launch Virgin Mobile in India

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Virgin's youth-focused service, Virgin Mobile, will deliver a "more tailored, more relevant offering" aimed at India's young population. Some 51 percent of India's population of 1.1 billion people is under 25 and two-thirds under 35.

Referring to the venture, Virgin Group Chairman Richard Branson said, "We have been working on this for a long time. This is Virgin Mobile's seventh launch globally and Virgin's largest investment to date in India." However, the financial details of Virgin's tie-up with the Tatas have not been revealed.

"The Indian market is growing like no other market in the world," he said, referring to the nearly 8 million new mobile users who sign on every month, drawn by very low call rates.

India is the world's fastest-growing mobile services market, attracting foreign firms including Vodafone Plc and SingTel, which has a stake in leader Bharti Airtel.

Virgin Mobile estimates there are 215 million urban youth mobile subscribers and an additional 50 million urban youth subscribers over the next three years.

Jamie Heywood, deputy CEO of Virgin Mobile in India said, "We expect that revenue in this segment will be in excess of Rs.35000 crore in 2010."

Branson said that, "Virgin Group expects to get 5 million subscribers over the first three years with special value-added services and handsets priced at Rs.2,000-5,000 ($50-$125). Initially the service will be launched in 50 cities which by the year end will be expanded to 1,000 cities countrywide."

With Virgin's foray in to the Indian market to the already prominent foreign ownership in mobile service providers being capped at 74 percent, Branson feels that the tight controls in sectors such as telecoms, airlines and retail should be relaxed since Virgin's entry into the telecom sector faced rough weather as the GSM players lobby Cellular Operators Association of India (COAI) had shot a letter to the Department of Telecom (DoT) seeking its view on whether Mobile Virtual Network Operator (MVNO) was allowed in the country.

Tata Teleservices and Virgin Mobile meanwhile maintain that the deal is purely in terms of brand extension and cannot be considered as MVNO since there is no deal involving air time. According to TTSL Managing Director Anil Sardana, Virgin Mobile is just another brand that the company would offer.

Virgin is seeking to tap India after Britain-based Vodafone, the world's largest mobile company, made its entry last year by buying Indian cell phone operator Hutchison Essar for $11.1 billion.

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