Essar Telecom Retail said on Tuesday it will invest $250 million in two to three years to set up 2,500 stores in a bid to take its revenue beyond $1 billion.

"The telecom retail space is vastly unorganised. We want to give customers value for money. Given the opportunity, we want to invest $250 million over a period of two to three years to set up 2,500 stores from 70 now," ETR Chief Executive and Director Rajiv Agarwal told reporters in Mumbai.

Announcing a tie-up with Richard Branson's Virgin Group for customer service and technology transfer, he said the company aimed at no less than $1 billion revenue in the next three years.

"In 2006, the mobile handset market in India was pegged at Rs 30,000 crore. It is set to go up to Rs 50,000 crore (Rs 500 billion) this year," he said, adding the company expects to grab 10 per cent of that market.

ETR expects to generate 70 per cent of its business from mobile handset selling, while the rest would come from other value-added services, Agarwal added. 

The company would roll out stores in the Tier II cities as well. ETR has already entered into long-term agreements with leading mobile handset manufacturers and service providers to meet the customers' demands, he said.

Asked whether ETR has plans to manufacture handsets on its own, he said, "nothing at the moment...but we can't say what lies in future."