Sistema Shyam okay with GSM rivals bidding for CDMA spectrum

Company today announced its third-quarter earnings where it reported revenue decline of 30% to Rs 284 crore

Sistema Shyam Teleservices today said it has no problems with GSM players competing in the upcoming auction to buy CDMA airwaves.

"We have no reservation against GSM players bidding for 800 Mhz (CDMA band) and competing with us. What is important is that 800 Mhz should be put for auction so that our growth plan is not throttled," SSTL's Chief Executive Officer Dmitry Shukov said today.

SSTL, which operates under MTS brand name, provides mobile services using CDMA (Code Division Multiple Access) technology while leading telecom players like Airtel, Vodafone, Idea Cellular use GSM (Global System for Mobile communications) technology.

SSTL today announced its third-quarter earnings where it reported revenue decline of 30% to Rs 284.4 crore from Rs 404 crore in the same period a year. Its net loss for widened to Rs 760 crore for the quarter ended September 30, mainly due to forex loss and business restructuring.

Following the recommendation of the Empowered Group of Ministers and decision by inter-ministerial panel Telecom Commission, the Department of Telecommunications has asked TRAI three times to recommend base price for CDMA spectrum.

The DoT last week had asked Trai to suggest a reserve price for 800 MHz band, used for offering CDMA services, within 15 days. Trai replied saying it cannot suggest a price for auction of spectrum in 800 MHz band, used for offering CDMA services, as the process needs to be started afresh.

The Telecom Regulatory Authority of India (TRAI) had recommended up to 62% cut in base for GSM spectrum and no auction of 800 MHz spectrum used by CDMA players. It suggested that the possibility of a part of CDMA airwaves being used for GSM services may be explored.

The regulator was criticised for allegedly favouring GSM service providers.

Shukov stated that the government should look at promoting future technology, saying: "GSM technology will die in another three years."

"New technologies like 3G, LTE (4G) will replace it. There is no need of talking about using spectrum for old technologies," he added.

SSTL was the only bidder for CDMA spectrum in March 2013 auction where it bought airwaves for mobile services in 8 out of 22 service area: Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Uttar Pradesh (West), Kerala and West Bengal.

The company did not buy spectrum in other service areas as it termed the price expensive.

Shukov said government should give it the same discount as has been given to GSM players in the third-round of auction.

"The base price that government will give us will be a starting price. The final and market value of 800 Mhz spectrum (is) discovered in auction," SSTL Chief Financial Officer Sergey Savchenko said.

SSTL's Head for Strategy Ranjan Banerjee said the amount of spectrum the company possesses is not adequate for deploying any new technology.

"The government has given us Unified Licence which is valid for 20 years. We should get opportunity for growth , access to spectrum to grow our business.

"The quantum of spectrum that we have is not enough to modern technologies. Telecom business is all about modernisation and upgradation," Banerjee said.

Shukov said that the company has invested billions and it should be given a fair opportunity to nurture its business and compete with others having adequate spectrum.