Sistema gets cautious, defers listing in India

Amid uncertainty over the ongoing investigation into the 2G scam, Sistema Shyam TeleServices Ltd (SSTL), which offers services under the MTS brand, has deferred its plans to go public and list the company on the bourses.

"In this kind of the environment, I would say we would definitely have to see... What the outcome would be of the various investigations," SSTL President and CEO Vsevolod Rozanov said.

The company wants to go public by listing on the Indian bourses. SSTL is a joint venture between Russia-based Sistema, the Russian government and Shyam Group of India.

The Russian Federation holds a 17.14% stake in the company. Sistema is the majority shareholder with a 56% participating interest and the remaining is with the Indian promoters.

The Indian telecom sector, which is one of the significant contributors to the country's GDP, is the focus of several investigations in connection to the allotment of 2G licences under the regime of former Telecom Minister A Raja.

"One has to see the rules of the game. We have to look at the outcome of these investigations, the rules of the proposed new telecom policy and the spectrum issue. We definitely need to wait until regulatory clearance arrives," Rozanov added.

In 2010, the Russian government's investment of Rs 2,698.8 crore in SSTL provided the company with additional financing that will help it to rapidly expand its high-speed data network across India during 2011.

The CAG had quantified a presumptive loss of over Rs 1.76 lakh crore due to the sale of 2G spectrum in 2008 by former Telecom Minister A Raja and the matter is being investigated by various agencies.

The company will complete three years of Indian operations in October with a total investment of USD 3 billion by the end of this year.

"Sistema has arranged USD 3 billion for overall commitment from the group on various operations, out of which around USD 2.4 billion to USD 2.5 billion has already been invested and the rest will be realised by the end of this year," Rozanov said.

SSTL offers mobile and data services in 20 circles out of 22 circles in the country. The company will soon offer services in the remaining circles within a week or so.

"Our network is present in 20 circles out of total 22 circles in the country. Will launch last two in few days in J&K and North East," Rozanov said added.

The company has over seven lakh data subscribers and overall, it has more than 11 million customers, including voice.