Sistema Shyam hopeful of profitability by 2012-end

Russian mobile major Sistema, which offers MTS brand of CDMA mobile services in partnership with Shyam Telecom in India, is hoping to be EBIDTA positive (be profitable) by the end of 2012.

"We are hoping to become EBIDTA (earnings before interest, depreciation, tax and amortisation) by 2012-end or early 2013," President and CEO of Sistema Shyam Teleservices (SSTL) Vsevolod Rozanov told PTI.

The company obtained its pan-India licence for mobile services in March 2008.

Telenor, a new GSM operator which operates in India under the Uninor brand name had said it would achieve EBIDTA break-even in three years, with operational cash flow (OCF) break-even in five years from the launch.

SSTL operates with stiff competition from established CDMA players like Anil Ambani's Reliance Communication, Tata Teleservices (Indicom). It has roughly 1 per cent marketshare now.

Rosanov said SSTL should be able to cover all the 22 circles by end of the year. At present, it has 4 million subscribers from 11 circles.

Though the company does not give projections on future subscriber acquisitions, Rosanov said by the time a company becomes EBIDTA positive one needs to have roughly 30 million subscribers. Most of that will be from the voice.

To reach the net profit level, he said the key variable is successful data service.

SSTL has tied up with more than 200 operators across 90 countries to offer SMS services to its customers.