Updated 26 May, 2012, 4:18 pm IST

Future Group and Tata Tele Launch New GSM Brand in India

22 Jun, 2010, 2:28 pm IST | by Press Release |

Two years after launching the Virgin Mobile brand in India through ‘franchise’ partnership, which was through a joint venture with UK based Virgin group, TTSL now enters into their second partnership venture through an agreement with retailer, Future group. This represents the first instance of a Retailer – Telco partnership model for a mobile service in India. Virgin Mobile targeted the youth segment with its key differentiating factor being talk time credit for incoming calls. The latest mobile service branded as ‘T24’ or ‘Talk24’, targeting shoppers at Future Retail outlets offers similar free talk time plans to its subscribers. Although the Virgin Mobile venture was under intense scrutiny for regulatory compliance, no such hurdles are expected in its alliance with the retailer. As was the case in agreement with Virgin Mobile, which initially started as a CDMA service but was later extended to GSM; this deal will mean another channel for customer and traffic growth, generating additional revenue stream for TTSL.
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Future group enters telecom market to increase wallet share of customer spend
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Future Retail charted a great success story in Indian Retail through lowest cost product offerings and novel supply chain procedures. With its well established customer base, its strong brand 'Big Bazaar' and an extensive geographic presence in urban and semi urban markets, the Future group has powerful assets which can be leveraged in the telecoms market. As part of its ongoing growth strategy, Future group is aggressively cross selling services like insurance, loans, holidays etc. exclusively for its shoppers. A cobranded Telecom service will provide it with an additional service for its existing customers. Linking usage in its retail store with mobile talk time and vice versa will interest a number of its customers.
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However an ultra competitive telecoms market environment coupled with poor penetration of organized retail in India (less than 10%) will mean that this offering will succeed only in its niche segment of middle class customers, most of whom already own a mobile connection. With its new mobile offering, we don’t believe that this joint venture will compete directly with established operators. They will still bet on plain voice service plus cheaper content services. Free talk time for retail spends will be the key service differentiator.
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The future will see Telco’s competing at different levels
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With around 15 telecom players in India, the current mad rush for market share will shift to focused battle between players which will be fought at different levels with different scale of operations of each set of players. At one end, there will be large established incumbent players who will try and control end to end customer experience through complete bouquet of telecom products and services. At the other end, their will be niche players who will target specific customer segments through two or more brands and will therefore develop focused content and applications. Dipping revenues and profit margins will force telco’s to explore more such strategic partnership options, since proposed licensing guidelines which allow MVNO services is still pending with the Department of Telecom.

Tags: Future Group , Tata

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