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| Russian govt to infuse $670 mn in Sistema Shyam |
| BS Reporter / Kolkata May 22, 2009, 00:28 IST |
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The Russian government is likely to pick up equity amounting to $670-700 million in Sistema Shyam TeleServices Ltd (SSTL), a joint venture between Russia-based telecom major Sistema and Shyam Group in India, by the end of this financial year.
After the deal, Sistema, which holds a 74 per cent equity stake, might have to shed 20 per cent of it, while Shyam will maintain its 23.5 per cent stake.
"The Russian government has already approved infusing about $670 million. We are negotiating with the government regarding the stake sale and valuations. After we get the approval, we will seek Foreign Investment Promotion Board (FIPB) clearance in India," said Vsevolod Rozanov, president and chief operating officer, Sistema Shyam TeleServices, at a press conference here today to announce the commencement of the company's mobile services in Kolkata.
The JV company, which aims to have at least a 10 per cent market share in mobile services in the next five years, has prepared a capital expenditure plan of about $5.5 billion over the period in India. Of this, about 40 per cent would come through equity participation by the two companies and the Russian government, said Rozanov.
So far, the company has invested about $1.2 bn in India for spectrum allocation and other infrastructure. Sistema Shyam is hoping to have a pan-India presence by the middle of next year.
Under the MTS brand, the company now operates in Kolkata, Tamil Nadu, Kerala and Rajasthan cellular circles, with a subscriber base of 9,20,000. It will commence operations in the West Bengal circle soon, said Rozanov. "We intend to cover one circle per month. After West Bengal, we will enter Bihar and Jharkhand, followed by Maharashtra, Delhi and Haryana by December this year,” he added.
Meanwhile, the company said it was planning to launch its services in Delhi by August, a move that is likely to intensify competition among the seven telecom players in the national capital.
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