Branson in branding deal with Tata Tele

NEW DELHI: Richard Branson’s Virgin Group plans to rock the Indian telecom market through a branding and marketing tie-up with Tata Teleservices that is likely to be unveiled early next year. While the details are yet to be finalised, the tie-up involves distribution of Virgin mobile handsets to Tata customers and bringing in Virgin’s global experience in marketing and branding to spruce up the market share of the Tata Group’s telecom business.

The collaboration is expected to materialise soon and it may not involve big investments by Virgin. Rather, the UK-based group is expected to bring in its wealth of experience in telecom marketing and technology through its branded handsets.

“We are entering a sector where customers are frustrated. There is a need for more competition,” Sir Richard told ET in an exclusive interview. While declining to go into the details of the proposed expansion in India, he added: “I am coming back to India in March to announce a new business. We will shake up another industry which is in need of more competition. Customers are frustrated in this sector (due to poor connectivity) though it is a central part of their lives.”

While the prospective partners are tight-lipped on the details, Virgin’s plan for a tie-up with the Tatas comes at a time when its UK rival Vodafone has carved out a large slice of the Indian market by taking over Hutch’s stake in Hutch-Essar.

With Branson keen on the Indian market, the UK-based group tried to obtain permission for a Mobile Virtual Network Operator (MVNO) licence here to buy mobile telecom capacity in bulk and retail it with attractive branding. However, Indian authorities have not allowed MVNO system till now.

On the Virgin Group’s plans for the aviation sector in India, Branson said efforts are being made to get a ‘stretch’ version of the Airbus A380 superjumbo so that precious airport slots could be used to handle larger number of passengers. This could result in adding 20% more capacity on the A380 in a three-class configuration. Virgin Atlantic is also looking at launch of flights to new destinations beyond Delhi and Mumbai. “Our services are successful in Delhi and Mumbai. The upper class and premium economy are sold out most of the time while capacity on economy is seasonal. We will look at new services on the basis of availability of airport slots,” he said.

Expressing disappointment at denial of permission to invest in domestic airlines, Branson said he expected the restriction to go in course of time. “We understand that there is no window now. While we are still keen, we are not banging on the door. We will wait for the law to change,” he noted. “Some day India will get ready to be open for more competition and we will get in then. Till then we will continue to innovate our services and provide more options to passengers through international flights.”
The Virgin chief also acknowledged that competition was growing with the expansion of Air India and Jet Airways. He expressed the confidence that Virgin Atlantic would provide value to its customers and remain competitive.

The new Virgin terminal (terminal 6) at Heathrow is a delight and passengers would enjoy the facilities. “You can drive up to the door and the upper class lounge is just six metres away,” Branson said. The new terminal is manned by Virgin’s own security rather than Heathrow security which has stopped passengers from driving down to the airport gates.

The Virgin boss said he was interested in investing in the retail sector too. As foreign investment in retail is permitted only through the single-brand window, the UK-based Group is likely to look at options available for joint ventures.