Sistema to close Indian operations in almost half of regions

Sistema Shyam TeleServices lost all but one of the 22 telecom circles

Russian firm Sistema today said it will shut mobile phone operations in almost half of the regions it current operates in India, as it prepares to bid for spectrum in next month's auction.

Sistema Shyam TeleServices Ltd, the Indian joint venture of the Russian conglomerate, lost all but one of the 22 telecom circles when the Supreme Court last year struck down award of 122 licences.

SSTL, which operates on CDMA platform, will shut operations in 10 zones within a month and will participate in the auction beginning March 11.

"I would like to confirm our intention to participate in the upcoming spectrum auctions in March 2013....The go forward plan includes continuing with the company's focus on its data centric-voice enabled strategy in select circles," SSTL President and CEO Vsevolod Rozanov said in a statement.

As per the Supreme Court order, companies that lost licences have to win telecom airwaves in the government auction to continue services.

SSTL did not say how many circles will it bid for.

The company, which provides service under MTS brand name, said it has started the process of informing its customers in 10 circles -- Assam, Andhra Pradesh, Bihar, Himachal Pradesh, Haryana, Jammu and Kashmir, Madhya Pradesh, North East, Orissa and Punjab -- to switch to other telecom operators of their choice.

"SSTL is providing a 30-day time window to all its customers in the 10 circles to exhaust their balance and to port out to a telecom operator of their choice," it added.

Closing of company's services in 10 circles is estimated to impact around 22 lakh customers.

Besides this around 10 per cent of its 3000 employees would be impacted. SSTL said it is making effort to absorb most of these employees.

"In-addition, care is being taken to place some of the employees in other companies. The company will also be closely working with all its local partners to address their concerns," the SSTL statement said.

The company did not participate in November 2012 auction citing that its curative petition is pending before the apex court in which it has sought exemption from SC judgement that cancelled its telecom permits.

The curative petition of the company was rejected by the apex court last week.

In a separate order on February 15, 2013, the Supreme Court asked telecom companies whose licences were cancelled by it and could not win or participate in November 2012 spectrum auction, to close their operations.

SSTL, however, said the order does not impact its business and a separate order by the apex court on its matter is awaited.

Russian conglomerate Sistema JSFC and Russian government hold 56.68 per cent and 17.14 per cent stake respectively.