New Delhi - Britain's Virgin group announced Sunday its entry into the fast-growing Indian mobile phone services market under a brand franchise agreement with Tata Teleservices Limited, news reports said. Virgin Mobile wireless services would provide value-added services to the Tata Group arm targeting customers in the age group of 15 to 30, PTI news agency reported.
Virgin was targeting a customer base of 5 million in the youth segment in India within three years, Virgin Group founder Richard Branson was quoted as saying while announcing the launch in Mumbai.
"India is an exciting market. There are more than 215 million Indians aged between 14 to 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 (about 8.74 billion dollars). We will target 10 per cent of the urban youth market," Branson said.
Virgin's entry into the Indian telecom market had faced an initial hitch with the Cellular Operators' Association of India writing to the Department of Telecom in February seeking its view on whether a mobile virtual network operator (MVNO) was allowed in India.
An MVNO is a company that provides mobile phone services but does not have its own frequency allocation on the radio spectrum and usually does not have its own network infrastructure.
"The deal is aimed at just bringing value-added brand services to India's youth and nothing beyond this," Tata Teleservices managing director Anil Sardana said at Sunday's launch. "We are not going to sell spectrum to Virgin. It is not a MVNO service."
Virgin would be launching its services with six colour mobile handsets with prices ranging from 2,000 to 3,000 rupees (about 50-75 dollars). Virgin Mobile products and services would initially be available in 50 cities and, by 2008, in over 1,000 cities and towns, Virgin Mobile India deputy chief executive officer Jamie Heywood said.
India is one of the world's fastest growing mobile telephony markets with 242.4 million subscribers at the end of January 2008, up from 10 million in 2002, according to the Telecom Regulatory Authority of India's figures. There were 8.7 million new subscribers in January 2008.
The Indian government has set a target of 500 million mobile subscribers by 2010, but industry analysts say that slow infrastructure growth may bring this down by about 120 million.
