New Delhi: British billionaire and chairman of the Virgin Group, Richard Branson announced today that he has found an Indian telecom partner and that he would soon be entering the country’s domestic airlines market.
“We have a (telecom) partner now, and I will reveal all in two months’ time,” Branson told reporters at a conference to mark the first anniversary of Virgin Radio’s tie-up with HT Media Ltd for a local radio channel.
India, the world’s fastest growing telecom market, has received 575 applications from 46 domestic and foreign firms to launch mobile services in some or all of the 23 zones that make up the country’s wireless map.
Rules restrict foreign holdings in telecoms service providers to 74%, which means foreign firms need a local partner to offer services.
British mobile phone company Vodafone Group Plc entered India by buying a controlling stake in mobile carrier Hutchison Essar.
Southeast Asia’s top phone firm, SingTel, has a 30.8% stake in private market leader Bharti Airtel Ltd.
Branson, founder of Virgin which has interests from airlines to music, said he was waiting for India to relax its airlines policy, which prohibits foreign players from investing in the domestic air transport sector.
“We’d love the right to fly domestic in India, but the market is currently protected. If the market opened up, you will find Virgin competing alongside local carriers,” he said.
India’s domestic airline passenger traffic grew 36.74% in the first nine months (Jan-Sept) compared with the year ago period, according to government data.
Although domestic airlines have been posting losses due to heavy initial investments and low air fares due to competition, analysts estimate the trend will reverse in 2008 helped by consolidation and better capacity utilization.
“With a middle class population of 300 million, India offers a huge potential for domestic airlines. Foreign airlines have been looking forward to enter India for the past 10 years,” Kapil Kaul, chief executive of the Centre for Asia Pacific Aviation, said.
Virgin operates a daily flight to London from India.