Project study of Virgin Mobile in detail.

1. About Virgin Mobile
Virgin Mobile is a brand used by many mobile phone service providers based in
the United Kingdom, and operating in India, Australia, Canada, South Africa, the
United States and France; the brand survived only briefly in Singapore. The
international Virgin Mobile businesses each act as independent entities, usually in a
partnership between Sir Richard Branson's Virgin Group and an existing phone
company. Virgin Group provides the brand, and the phone company operates the
network infrastructure.
Virgin Mobile was the world's first Mobile Virtual Network Operator when it launched
in the United Kingdom in 1999. It does not maintain its own network but instead
contracts to use the existing network(s) of other providers.
“Virgin Mobile” brand is India’s ‘first’ national youth-focused mobile service. “Virgin
Mobile” branded services are being offered to the Indian consumers by Tata
Teleservices through a brand franchise with Virgin Mobile. Virgin Mobile India will
provide Tata Teleservices with experience and expertise in designing, marketing
and servicing of “Virgin Mobile” branded products for the youth segment.
The Virgin Mobile Revolution Evolution
Virgin Mobile, a leading branded venture capital organization, is one of the world's
most recognized and respected brands. Conceived in 1970 by Sir Richard Branson,
the Virgin Mobile Group has gone on to grow very successful businesses in sectors
ranging from mobile telephony, to transportation, travel, financial services, leisure,
music, holidays, publishing and retailing. Virgin Mobile has created more than 200
branded companies worldwide, employing approximately 50,000 people, in 29
countries. Its revenues around the world in 2006 exceeded £10 billion (approx.
US$20 billion).
About Tata Teleservices
Tata Teleservices is one of India's leading private telecom service providers. The
company offers integrated telecom solutions to its customers under the Tata

2. Indicom brand, and uses the latest CDMA 3G1X technology for its wireless network.
Tata Teleservices along with Tata Teleservices (Maharashtra) Limited operates in
more than 4500 towns across 20 circles i.e. Andhra Pradesh, Chennai, Gujarat,
Karnataka, New Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar, Rajasthan,
Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kolkata,
Kerala, Madhya Pradesh and West Bengal. Tata Indicom brand has a customer base
of over 23 million.
Launching in India
Branson also performed a sky-walk stunt, on an elevator that plunged
�
down 20 floors along the fa�ade of The Hilton in South Mumbai.
Branson on Sunday launched the Virgin Mobile brand in India through a franchise
arrangement with Tata Teleservices.
TTSL, which is the second largest CDMA operator with 22 million customers, will sell
the youth-based mobile service under the brand name of Virgin Mobile.
TTSL would be paying Virgin what would be in the nature of a royalty fee.
Virgin will not be entering India as a Mobile Virtual Network Operator (MVNO), as
feared by some of the existing telecom operators
An MVNO is an operator that does not own infrastructure, network or spectrum but
leases these to offer services. Virgin operates as an MVNO in all its global markets.
This is Virgin’s seventh launch globally and its largest investment to date in India,
The Virgin group and TTSL have also jointly established a company ‘Virgin Mobile
India Ltd’ to develop the new branded service.
The Virgin youth service aims to acquire 5 million subscribers over the next three
years, during which period it will become profitable too,

3. “The estimated population in India of people between 15 and 30 years is 400
million, almost six times the whole of the UK population; and these numbers
promise to be a lot of fun.
there were 215 million Indians aged 14-25 and over the next three years there
would be 50 million additionally. In all, revenues from this segment then would be
over Rs 35,000 crore,
To begin with, Virgin Mobile will be launched in 50 cities, and in a year’s time in
over 1,000 cities. Specially designed handsets in the Rs 2,000-5,000 range would
be offered by TTSL, but customers are free to buy CDMA handsets separately, since
Virgin would be offering a SIM-card based CDMA service, the first such offer in
India, said Mr Heywood.
The CDMA major will launch the services initially across 50 cities (in 17 circles) and
will cover over 1,000 cities by the end of the year.
The launch has already created 250 jobs that would increase depending on the
growth of the company in India.
Virgin Mobile Brings India its First National Mobile Service for Young
People
Virgin a global mobile communications brand, recently entered the Indian market
with Virgin Mobile India, said to be the country's first national mobile service
focused on teenagers and young users.
Since Virgin Mobile doesn't have a network of its own and operates worldwide by
collaborating with other operators, in India the company works together with Tata
Teleservices.
With a "Think Hatke" philosophy and a wide range of new offers, Virgin Mobile India
plans to quickly attract several million customers. The company comes with
attractive phones plus offers that India didn't have until now. For example, Virgin
users will get extra credit for every incoming minute received from any other

4. network, they will be able to call more for less and also to easily upgrade their
phones.
"Virgin Mobile’s strategy is different. We want to deliver a more tailored, more
relevant offering for a single, distinct segment. We are not pursuing scale for
scale’s sake."
With about 225 million subscribers, India is one of the most important mobile
markets in the world, currently having no less than 10 mobile operators with over 1
million subscribers. Among them, Airtel, Reliance, Vodafone, BSNL, Tata and Idea
Cellular all have more than 10 million customers. Only time will tell if Virgin Mobile
can integrate into this market.
'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.
Virgin for the niche youth market. The Virgin-based service would offer the extra
zing that young users want, such as music, games and downloads.
The new mobile operator is the “first nation-wide youth focused mobile service” and
the “first CDMA service where all customers will be on RUIM (SIM)-based phones.”
Now the weird part. Even though Virgin Mobile doesn’t own the infrastructure they
don’t call the new service an MVNO. Apparently, virtual operators are not permitted
in the “world’s fastest growing mobile phone market,” hence Richard Branson refers
to the joint venture as “a brand extension” plan. The difference is that both

5. companies — Virgin Mobile India and Tata Teleservices — have the freedom to work
with other partners and enter into similar agreements with other players.
While other players offer services from networks that they own and operate, the
Virgin Mobile network is owned by Tata Teleservices , which has a brand franchise
agreement with Virgin.
The result: unlike, say, Bharti Airtel or Reliance , Virgin does not require significant
capital investments to set up networks.
At the launch, Virgin Mobile executives were at pains to clarify that the
arrangement with Tata Teleservices is not a Mobile Virtual Network Operator
(MVNO) -- which is not allowed in India -- but rather, a simple brand franchisee
model.
Virgin Mobile’s Strategy- Seeking Youngistan
For Virgin Mobile, the crowded but high-growth market is a mixed blessing. The bad
news first. Mobile penetration in urban India may be in excess of 40 per cent
(according to management consultancy The Boston Consulting Group), but the
heavy-use customers are already tied to one network or the other.
And given the lack of number portability -- retaining your mobile number even if
you change the service provider -- Virgin's chances of persuading these high
spenders to switch service providers are pretty slim.
Our strategy is to deliver a more tailored, more relevant offering for a single,
distinct segment,"
• That segment is the Indian youth. There are 215 million Indians aged
between 14 and 25 years, of whom 70 million own mobile phones. Over the
next three years, Virgin executives expect this segment to add another 50
million new mobile phone subscribers.

6. • The youth are also significant users of SMS and are potentially large
customers for other value added services (VAS). The VAS market was in
excess of Rs 4,800 crore (Rs 48 billion) in 2007, with SMS making up 40 per
cent of revenues, followed closely by ringtones.
• Younger customers also have a shorter handset upgradation cycle -- under
12 months, compared to two years for those over 25 years.
• To begin with, they make more and longer out-bound voice calls, which
means huge billing potential for service providers. Then, they have large
circles of friends for both making and receiving calls -- which offers a
revenue opportunity not just from the entire group switching to a common
service provider but also from customised services like closed user groups
and so on.
The Opportunity- Consumer inside
With its target customer clearly defined, Frequent handset changes fits in better
with GSM technology. In CDMA technology (which Tata Teleservices and, therefore,
Virgin offers), the SIM card is usually embedded in the phone. Which means a
handset upgrade involves an entirely new connection, complete with new number.
Virgin Mobile worked around it by introducing CDMA phones with RUIM (removable
user identity module) technology, similar to GSM phones, offering users the
convenience of upgrading their phones without having to change their number or
re-entering their address book.
Then, it was important to be pocket-friendly -- young customers aren't likely to
have huge disposable incomes, although they will demand cutting-edge technology
and style.
Tata Indicomm has already established itself in the mass market category
Though wireless subscribers in India have already crossed the 100-million mark,
making India one of the top five markets in the world, still more than 50% of the
population is to be covered by mobile services.

7. Virgin Mobile hopes to capture at least 10 percent of the incremental market (that
is, five million subscribers) within three years.
According to Virgin's homework, nearly 95 per cent of young users are pre-paid
subscribers, who typically run out of both talktime and recharging money by the
month-end.
Virgin's handsets are therefore named and priced to appeal to its target audience --
vKewl retails at Rs 3,999, while vBling sells for Rs 2,500, which is about half the
price at which competitors will sell similar handsets. "We looked at a combination of
looks, features and more affordable handsets as the youth need style but also
value," confirms
Then, it was important to be pocket-friendly -- young customers aren't likely to
have huge disposable incomes, although they will demand cutting-edge technology
and style.
Virgin Mobile worked around it by introducing CDMA phones with RUIM (removable
user identity module) technology, similar to GSM phones, offering users the
convenience of upgrading their phones without having to change their number or
re-entering their address book.
Get paid to receive calls: Virgin offers its customers a 10-paise credit for every
minute of incoming call, regardless of the originating network. Competitors dismiss
the plan, saying it has limited potential,
Service Reach
Virgin Mobile branded services will be available across 20 telecom circles that
account for 99 percent of the country’s mobile subscriber base. These include
Andhra Pradesh, Chennai, Gujarat, Karnataka, Delhi, Maharashtra, Mumbai, Tamil
Nadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal

8. Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata, Madhya Pradesh
and West Bengal (excluding Andaman and Nocobar).
Distribution Reach
At launch, customers will be able to access Virgin Mobile branded products and
services in 50 cities across 17 circles.
Virgin Mobile branded products and services will also be available across a host of
modern retail outlets including The Mobile Store, Hotspot, RPG Cellucom, Univercell,
Croma, Convergem and Mobile NXT as well as other leading mobile outlets.
By the end of 2008, Virgin Mobile branded products and services will be available
for sale in over 1000 cities nationwide. Through this footprint Virgin Mobile will
cover approximately 60% of the urban youth market by end of the year.
Handsets
Virgin Mobile has relationships with all leading handset manufacturers. It currently
offers a range of six handsets with a blend of style, features and affordability. The
handset prices start as low as Rs. 1,800 and go upto Rs. 5500.
CDMA vs. GSM?
CDMA is quickly catching up with GSM; and the subscriber base (for CDMA) in India
has already surpassed 50 million fixed and mobile device users.
• 50 million subscriber growth reached this milestone only four years
after the technology’s introduction to the market, while it it took GSM more
than ten years to reach the same number.
• CDMA growth rate exceeds than that of GSM on a monthly basis (5% vs.
4,1%).

9. • With up to 2.01 million net subscriber additions in June 2007, CDMA2000’s 5
percent growth rate exceeded that of GSM, at 4.1 percent,.
• Reliance Communications and Tata Teleservices, are among the top 20
fastest-growing operators in the world.
• CDMA2000 is quickly becoming the technology of choice for emerging
markets.
• Reliance has embarked on one of the largest CDMA2000 network expansions
on the planet—with plans to reach more than 20,000 towns and 300,000
villages.
• You can spend this call balance whenever you want since there is no expiry.
Its a win-win situation for both Virgin Mobile and the customer.
Key reasons behind this growth are:

10. • Availability of very low-end (VLE) handsets - There are currently 45 VLE
CDMA2000 devices from 14 suppliers available below US$50 in wholesale
price.
• Rapid expansion of the CDMA2000 networks into the rural areas of India to
deliver state-of-the-art telephone and broadband Internet access
• Price gap between 2G GSM low-end handsets and 3G CDMA2000 handsets
has narrowed to only $4 USD