Sir Richard 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.

The financial arrangements between the two companies were not disclosed, but an official said 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, said Mr Anil Kumar Sardana, Managing Director, TTSL, at a news conference here.

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. At the news of Virgin launching in India, the Cellular Operators Association of India had written a letter of complaint to the telecom authorities.

Big investment

This is Virgin's seventh launch globally and its largest investment to date in India, said Sir Richard, noting that the Indian market was very attractive, growing like none other in the world.

The Virgin group and TTSL have also jointly established a company 'Virgin Mobile India Ltd' to develop the new branded service. The investment details of this company were not disclosed either.

The Virgin youth service aims to acquire 5 million subscribers over the next three years, during which period it will become profitable too, Sir Richard said.

"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," Sir Richard said.

Mr Jamie Heywood, Deputy CEO, Virgin Mobile India, said 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, he said.

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.