Essar to invest Rs 1,100 cr in telecom retail

MUMBAI: Underlining its intention to be a long-term telecom player, the Essar group on Thursday said it will pump over Rs 1,100 crore in its telecom retail venture over the next two-three years. The group has already set up a telecom tower company as part of its efforts to strengthen its presence in what is now a very lucrative sector.

Essar Telecom Retail will set up a national chain of multi-service outlets called `MobileStore’ offering handsets, mobile accessories, new connections, value added services and bill payment facility.

“We are investing $250 million initially and then we’ll see how much more is needed,” Essar Telecom Retail CEO Rajiv Agarwal told ET.

Essar has tied up with Nokia, Motorola, Sony Ericsson, Samsung, Reliance Mobile and Tata Indicom to market their handsets. It will also partner with leading service operators including Airtel, Hutch, BPL, Idea, Aircel, Reliance and Tata Indicom for their pre-paid and post-paid connections.

“The outlets will also offer other electronic products like digital cameras, iPods, Xbox and Tata Sky DTH connections,” he said.

To begin with, Essar Retail has launched 40 stores in Mumbai, Delhi, Kolkata, Hyderabad, Chennai, Bangalore and Ahmedabad. “We are looking at 4,000-5,000 touch points in the form of stores, kiosks and shop-in shops,” Mr Agarwal added.

In the first phase, Essar expects to set up a network of 150 stores in the top 11 cities and plans to increase the number to 2,500 stores in the next three years. The stores will be set up in three formats — large, medium and compact, besides shop-in shops in malls and large retail outlets, he said.