Future Group to expand its telecom retail business

India’s top retailer, Pantaloon Retail is forming a new company to considerably scale up its telecom retailing business in a 50:50 joint venture with UAE-based Axiom Telecom, for an investment of $40 million. The venture aims for $20 crore revenues in first year of operations.

Pantaloons already has a Rs.500 crore mobile retail business through ConvergeM. It has a three-pronged strategy – (1) M Bazaar (Shop in shop with Big Bazaar stores), (2) M Port (independent brand stores) and (3) Gen M (kiosks in malls, multiplexes catering to impulse buying).

The new company will distribute mobile handsets, accessories and set up service centres across India. It will also develop backend sourcing infrastructure for Pantaloon’s existing telecom business. The service centres will also refurbish used phones, offering a one-year warranty on them.

Mobiles will soon become the single largest electronic products retailed in the country. But Pantaloon is not going for a private label mobile phone as prices are dropping regularly. Though they are focussing on low-end used phones markets as well as on offering personalised and lifestyle phones.

Future Group with its wide presence and Axiom Telecom with its knowledge and expertise will be best positioned to retail and service the Indian telecom market. Though the company has to deal with the short-interest span in new cell phone models and competition from established chains like Virgin-Essar’s Mobile Store and Subhiksha Mobile.