Virgin Mobile’s partnership with Tata Teleservices has come under scrutiny from the Cellular Operators’ Association of India (COAI), reports The Times. Virgin’s Indian expansion plans have been dubbed illegal by the industry body, which is calling for the Indian government to void the deal. The government has reportedly asked Tata for details of the agreement, but has not blocked the move yet. COAI argues that Virgin is buying mobile capacity wholesale from Tata and then selling it under its own brand as an MVNO, an arrangement not allowed in India, according to The Times. A Virgin Mobile spokesman said the agreement doesn’t involve selling bulk airtime. Both Virgin and Tata insist they have a legal franchise agreement, the report added.
At the launch on Monday Virgin said it is targeting India’s youth market with the service, claiming there are 400 million Indians aged 15-30 years and the segment is expected to add 50 million new subscribers over the next three years, creating a market worth INR350 billlion. Virgin expects to capture 5 million subscribers within three years of launch by offering services in more than 1,000 Indian cities. The move is Virgin Mobile’s seventh launch globally. India is the world’s fastest-growing mobile services market. According to Wireless Intelligence, Virgin’s partner, Tata, is the fifth largest operator in India.