TelecomTalk’s Analysis On Exit Of Virgin Group From Tata Teleservices

TelecomTalk’s Analysis On Exit Of Virgin Group From Tata TeleservicesIt seems that Sir Richard Branson jumped from the 14th floor in 2008 for wrong reason!

Virgin Mobile India, a JV between Tata Tele (TTSL) and Virgin Group which started in 2008 has come to an end as Virgin Group is planning to exit from the venture.

TTSL will buy the shares of Virgin Group and will sell their services under Virgin brand. For that TTSL will pay to Virgin Group for brand royalty.

Still spokesperson of both TTSL and Virgin India did not comment on this. It is also not clear for how much Tata is buying Virgin’s share in the JV. It is expected TTSL will buy the share in phased manner.

Many experts think that it is not unexpected as TTSL is trying to keep all telecom business  under one roof, as they already started working to merge TTML with main TTSL. They also indicate that Virgin group often sold its share in different markets (USA and Canada) to its partner and entered in the brand sharing agreement.

Virgin Mobile India – Never a Sucess Story – Why?

Virgin Mobile chose wrong operator -it made entry into India partnering TTSL in March, 2008.That time TTSL was offering mobile services only on CDMA as Tata Indicom. Tata Indicom has no circles where it is positioned 1st or 2nd or 3rd as per subscriber base.

Virgin Mobile chose wrong technology – CDMA while it targets youth population. CDMA is not a preferred technology for youth as to be a Virgin one need to get a CDMA handset. Virgin did not introduce any great CDMA handset which can attract youths. Also limited choice of CDMA handsets keeps people to be a Virgin. Virgin Mobile did not offer OMH RUIM, OMH handsets and data services (1X or EVDO) on handsets. Even VMI plans are not really cheap, often hidden with daily rentals.

With excellent TVC, presence over social networking sites and paying for incoming calls Virgin Mobile India did awesome work for Brand Awareness. But nothing works!

Virgin’s foray into data card market (vFlash and vLink using TTSL CDMA 1X and EVDO network) never works because TTSL never wanted to give competition to its own Photon+. No cheap tariff of vFlash and vLink for youth certainly gives a thumbs down!

I always believe being under the hood of TTSL and not being a MVNO, venture of Virgin Mobile in India suffers a lot. TTSL treated VMI as stepson! Even Tata Indicom shoppe do not sell VMI connection, but they sell Tata Docomo. But TTSL can make really good with its CDMA services using Virgin branding. GSM Service from Tata Tele as Tata Docomo was introduced in India in 2009 and CDMA business goes under more negligence.

Interestingly Virgin strategy is followed by Tata Docomo which is GSM wing of TTSL, Tata Docomo with its catchy TVC, presence on social sites and exceptional 1p/sec tariff made a overwhelmed entry. Smartpaid concept of Virgin is now placed in Tata Indicom as Smart Postpaid.

Following Virgin GSM launch on Tata Docomo’s network Ranbeer Kapoor and Genelia were roped as Brand Ambassador – Now he is on the TVC for Tata Docomo. And I feel there’s no chance of Virgin 3G roll out on Tata Docomo 3G network.

Current Status of Virgin Mobile worldwide:

Virgin Mobile is now present in 8 markets.

Country Virgin Mobile
UK [GSM] UK’s 1st MVNO started in 1999 using Everything Everywhere network.
Australia [GSM] Australia’s 1st MVNO network started in 2000 with Optus. Now offering 3G & Broadband too.
USA [CDMA] Founded in 2001 as a MVNO, Virgin Mobile USA commenced operations in June, 2002. Virgin Mobile USA was acquired by its network services provider, Sprint Nextel Corporation in 2009.
Canada [CDMA/GSM] Stated as MVNO on Bell Mobility network. In 2009, Bell Canada acquired 50% of Virgin Mobile Canada and entered into a long-term agreement to use the Virgin brand. Virgin has access to Bell Canada’s CDMA and HSPA+ networks.
South Africa [GSM] JV between Virgin Group and Cell C. Launched in 2006. Offers 3G services too.
France [GSM] Started as MVNO using Orange SA (France Télécom) network since 2006.
Singapore [GSM] – failed venture Virgin Singapore was launched in October 2001 as a JV with Singtel. The operations were closed down by October 2002. Failure of the joint venture was attributed to a saturated mobile market.
India [CDMA/GSM]
  • Started in 2008 using Tata Tele’s CDMA network.
  • Not MVNO, rather reselling of TTSL CDMA products.
  • India’s 1st youth oriented mobile services.
  • Offering EVDO services too.
  • Later using Tata Tele’s GSM network Virgin Mobile GSM was unveiled in 2010.
  • Exit of Virgin Group from the venture in 2011 but TTSL entered in agreement to use the brand with paying to Virgin Group for band loyality.
Qatar [GSM] JV with Qatar Telecom (as Qtel Group), was launched 13 May 2010. Not MVNO, but reseller of QTel services under Virgin brand.

This Article Was Written By: Rudradeep Biswas

Rudradeep Biswas - Senior Telecom Analyst

The happy guy RDB (stands for Rudradeep Biswas) has been writing for Telecomtalk since 2009, covering mobile operators, 3G, broadband, WiFi, 4G, LTE, telecom policies and what-not related to Indian telecom. He is by profession a doctor, did his MBBS from R.G.Kar Medical College, Kolkata.

{ 39 comments… add one }

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  • rahan May 5, 2012 8:57 pm, 8:57 PM

    @saurabh
    no the sims r available in market u can buy it the scheme is also good from docomo but the sirvice poor like docomo

    Reply
  • saurabh July 22, 2011 9:12 am, 9:12 AM

    today in newspaper i read that now even the brand name will not be used by tata as was planned earlier so its complete shut down of virgin mobile bussiness and “its off dude”

    Reply
  • brijesh yadav June 12, 2011 3:45 am, 3:45 AM

    i want know, virgin mobile closed our services,
    because i using virgin sim.

    Reply
  • saurabh June 8, 2011 11:40 pm, 11:40 PM

    no further news from virgin mobile????????

    Reply
  • Manoj Abhigyan June 7, 2011 3:00 pm, 3:00 PM

    Telecoms regulator of Qatar, ictQATAR has ordered Qatar Telecom (Qtel) to close all Qtel Virgin Mobile-branded services in the country.
    The regulator said that it had conducted a study into the non-compliant launch of the MVNO in May 2010 and found that not only were the services marketed in a misleading manner, the company also ignored instructions to change its policies.
    The regulator also accused Qtel of engaging an anti-competitive behaviour during the launch of the Virgin Mobile service.
    In January, the company was ordered to stop signing up new customers until it brought its policies back into line with the regulator’s demands, but the regulator later found that it was still in breach of its requirements.
    Qtel is now required to transfer all existing customers currently on Qtel’s Virgin Mobile Service to a similar Qtel service or provide a full cash refund for the value of their VirginMobile SIM card and any credit balance they have intheir account.
    Qtel is also required to remove the Virgin Mobile brand from the marketplace.
    All Virgin Mobile branded SIM cards must be de-activated by August 4, 2011.

    Reply
  • altaf April 21, 2011 6:58 pm, 6:58 PM

    Good analysis RDB!!! India is sensitive market, they created hype successfully but their distribution and reach to the common man failed and let them down!

    Reply
  • DB April 21, 2011 3:08 pm, 3:08 PM

    @Chetan

    @ CHETAN … you seem to know a lot of (negative) things about TATA … are you a disgruntled ex-employee ? Seems so!

    >>Virgin Quit Tata Tele because many virgin GSM customers had major complains regarding Network coverage and quality.
    >> policy of Tata to restrict and deteriorate speeds has backfired on them!
    >>Tata Tele is an incompetent and impotent company (Network and GPRS wise)!

    Reply
  • Arjun Chandrashekar April 21, 2011 1:48 pm, 1:48 PM

    GUYS BEFORE PAST 5 DAYS I WENT TO MAHARASHTRA, AND I’VE USED MY AIRCEL CONNECTION AND WHEN I COMING BACK FROM MUMBAI, AIRCEL NETWORK HAS GIVEN A GOOD EXPERIENCE FROM MUMBAI TO PUNE ROAD WHICH IS STRONGLY CONNECTED BY WESTERN GHATS AIRCEL HAS AN EXCELLENT COVERAGE, BUT STILL IT IS THE MOST WORST PERFORMER IN MAHARASHTRA

    Reply
  • Raghu April 21, 2011 1:24 pm, 1:24 PM

    @Amit.g @Saurabh gupta
    yes guys u are right. it is highly impossible for Unitech to be removed from this business.

    Reply
  • Chetan April 21, 2011 1:03 pm, 1:03 PM

    Virgin Quit Tata Tele because many virgin GSM customers had major complains regarding Network coverage and quality. The only good thing about Virgin/Tata Docomo was their excellent GPRS speed, but policy of Tata to restrict and deteriorate speeds has backfired on them! Tata Tele is an incompetent and impotent company (Network and GPRS wise)!

    Reply
  • Pratap Madgulkar April 21, 2011 11:10 am, 11:10 AM

    good information ..

    I think it’s now time to rethink for T24 …..

    I am sure virgin will come with some different Idea and differnt operator ….

    Reply
  • kevin April 21, 2011 10:28 am, 10:28 AM

    Great work RDB…you have almost covered all the things…but much it lost due to internal politics as well….I liked what you wrote as Step son :)

    Reply
  • TUSHAR SHARMA April 21, 2011 9:49 am, 9:49 AM

    Good work RDB !!!

    Reply
  • Saurabh gupta April 21, 2011 8:52 am, 8:52 AM

    Vicky :
    @Raghu
    @amit.g

    Ya friends telenor should exit unitech from this business
    Then they can impove their position in indian telecom

    it is now almost impossible to exit unitec and telenor taking full control as indian law permits only 74% foreign holding and unitec is the main company who has been allotted licence

    Reply
  • Amit.G April 21, 2011 8:19 am, 8:19 AM

    @Raghu
    But according to the NTP no foreign company can hold more than 74% stake in india, the 24% should be owned by indian company. so telenor must have partner inorder to operate in india.

    Reply
  • ISHA April 21, 2011 8:12 am, 8:12 AM

    Very bad luck “virgin mobile”. Start your CDMA services in MTS and GSM services in VODAFONE and show them what is quality of service.

    Reply
  • Abhijit April 21, 2011 7:09 am, 7:09 AM

    I think As Tata now hold virgin stake, then Tata will withdraw all virgin schemes like all local & std calls at 0.25ps/min in Rs.29 recharge and also get paid for incoming calls scheme and only provide tata schemes now!!

    Reply
  • rajiev April 21, 2011 6:45 am, 6:45 AM

    wat will be next?

    Reply
  • Vicky April 21, 2011 6:08 am, 6:08 AM

    @Raghu
    @amit.g

    Ya friends telenor should exit unitech from this business
    Then they can impove their position in indian telecom

    Reply
  • chitranjan April 21, 2011 4:06 am, 4:06 AM

    Is it available in Delhi circle?@rajiev

    Reply
  • rajiev April 21, 2011 12:28 am, 12:28 AM

    ANIRBAN :

    Keshav Jha :
    MTS new dhamaka- Recharge with FRC 95/- and enjoy all local and STD calls @ 1p/2s for one year.

    Very good offer from MTS…wic state?

    Reply
  • Raghu April 20, 2011 11:50 pm, 11:50 PM

    virgin is exiting from the joint venture and tata is going to take shares of Virgin. So virgin will be operating in all circles .

    Reply
  • vasu April 20, 2011 11:45 pm, 11:45 PM

    not in delhi i think

    Reply
  • Raghu April 20, 2011 11:43 pm, 11:43 PM

    @Amit.G
    yes exactly Unitech should go away from Telecom and only Telenor should be there. so it will be good for the industry

    Reply
  • ANIRBAN April 20, 2011 11:28 pm, 11:28 PM

    Keshav Jha :
    MTS new dhamaka- Recharge with FRC 95/- and enjoy all local and STD calls @ 1p/2s for one year.

    Very good offer from MTS…

    Reply
  • Amit.G April 20, 2011 11:26 pm, 11:26 PM

    @Vicky
    Hi vicky Recently NTT DOCOMO has invested 800crores in tata to increase its share, docomo wants to have an controlling stake for which tata doesnt allow. wrt telenor, it already owns 67.25% in uninor and had planned to increase upto 74% by issuing shares for funding uninor, but unitech opposed that n got stay order from court.
    telenor wants unitech to quit from telecom as it has developd -ve perception towards unitech wrt 2G scam. Both telenor n docomo ll not form jv

    Reply
  • Arif April 20, 2011 10:54 pm, 10:54 PM

    When CDMA failed to takeoff then why MTS started CDMA?

    Reply
  • Vicky April 20, 2011 10:32 pm, 10:32 PM

    NTTDocomo and Telenor should come out of their joint ventures

    Reply
  • Keshav Jha April 20, 2011 10:11 pm, 10:11 PM

    MTS new dhamaka- Recharge with FRC 95/- and enjoy all local and STD calls @ 1p/2s for one year.

    Reply
  • Jagan April 20, 2011 9:54 pm, 9:54 PM

    Pratul :
    same story repeated everytime. i hope you remember what happened with BPL mobile which had a alliance with Idea, AT & T and Tata way back in 1999-2000, the whole consortium was called BATATA.

    Wow .. Remembering BATATA. Very nice.

    @author
    Yes, CDMA and TATA is a wrong option which TATA is not interested to promote CDMA

    Reply
  • Kaushik Roy April 20, 2011 9:06 pm, 9:06 PM

    VIRGIN lost its virginity ;)

    Reply
  • Vicky April 20, 2011 8:59 pm, 8:59 PM

    What about virgin brand in future

    Reply
  • Amit.G April 20, 2011 8:53 pm, 8:53 PM

    This was expected.. next will be T24 then videocon, loop, stel, cheers… later only 6-7 operators per circle

    Reply
  • Pratul April 20, 2011 8:46 pm, 8:46 PM

    same story repeated everytime. i hope you remember what happened with BPL mobile which had a alliance with Idea, AT & T and Tata way back in 1999-2000, the whole consortium was called BATATA.

    Reply
  • Manoj Abhigyan April 20, 2011 8:35 pm, 8:35 PM

    Good analysis. Now Tata should consolidate all its telecom business under a single brand.

    Reply
  • Pooja April 20, 2011 8:31 pm, 8:31 PM

    Badluck virgin

    Reply
  • Tremerin Dsouza April 20, 2011 8:31 pm, 8:31 PM

    Virgin could marry a GSM guy in 2008 instead of impotent CDMA and it could produce some fruitful results.

    Reply
  • Garg Vishal April 20, 2011 8:28 pm, 8:28 PM

    same will be the case of T24 mobile services

    Reply
  • Garg Vishal April 20, 2011 8:28 pm, 8:28 PM

    POOR VIRGIN

    Reply

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