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

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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 1^st MVNO started in 1999 using Everything Everywhere network.
Australia [GSM]	Australia’s 1^st 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 1^st 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.