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JOINING HANDS: Mr Robert Samuelson, Virgin's Director for Telecoms and Media (left), and Mr Rajiv Agarwal, Chief Executive Officer and Director Essar Telecom Retail Ltd, in Mumbai on Tuesday. — Shashi Ashiwal

Mumbai March 20 Essar Telecom Retail has entered into an agreement with the UK-based Virgin Group for brand licensing, technical and consultancy services for its mobile phone retail chain.

Virgin will provide its expertise in branding, customer care, store operations and staff training, and will also get royalty for use of its name.

The logo `Powered by Essar & Virgin' will accompany the store name of `The MobileStore'.

The Essar group company will invest $250 million (Rs 1,120 crore) over three years to set up a chain of 2,500 mobile retail stores across 600 cities in the country.

"Break-even will be achieved in two years' time and revenues of $1 billion (Rs 4,500 crore) will be achieved in three years' time," the Essar Telecom Retail's Chief Executive Officer, Mr Rajiv Agarwal, said at a news briefing here on Tuesday.

Margins in this business will be in the 10-12 per cent range, he said. The mobile phone business in India amounted to Rs 30,000 crore in 2006 and will increase to Rs 50,000 crore this year, Mr Agarwal said. "We hope to get a 10 per cent share of this market." The stores will be company-owned and company-run, said a statement. Already, 900 people have been hired for the venture. Currently, there are 70 stores in operation and another 100 will be established in the next few weeks. The company has already entered into agreements with mobile phone manufacturers and service providers.

In addition to mobile phone-related activities, the stores will stock entertainment products such as MP3 players, gaming devices and cameras, as well as offer repair and bill collection services.

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