MTS bets big on data services

Sistema Shyam TeleServices Ltd (SSTL), which offers MTS brand mobile services in 18 circles at present with a licence for 22, plans to be an essentially data-centric operator and sees large potential in the internet services segment given the current broadband penetration level of 0.8 percent compared with 55 percent in voice services.

The CDMA operator, a joint venture between the Russian conglomerate Sistema and Shyam group, today launched its data services in the Andhra Pradesh market, its 13th in the segment, and expects to complete the roll out in the rest of the circles by the end of 2011. It plans to invest Rs 30 crore in the state roll-out.

Speaking to the media here, Atul Joshi, chief sales officer, SSTL, said, “We have a 30 percent share in the data market. The data business is at an inflection point. We believe the internet market is going to see explosive growth.”

The company has invested over Rs 9,000 crore in its Indian operations since its launch in 2008, and has raised $ 600 million (around Rs 2,700 crore) from the Russian government by offloading 17 percent stake from Sistema's holding.

Its holding structure at present is 57:24:17:2 with Sistema, Shyam, Russian government, and minority stakeholders, respectively.

Joshi confirmed SSTL’s plans to go public saying it was a growing company expanding in new circles and fund deployment was not an issue. But the size and timing of the IPO have not been decided yet, he said. The company expects to breakeven by 2013.

In Andhra Pradesh, the company has 300,000 customers in the voice segment and expects to add 100,000 for its USB internet service by the end of 2011, according to Suresh S Kumar, chief operating officer (AP & Karnataka), SSTL.

The internet USB costs Rs 1,555 and comes with pre-paid plans starting from Rs 198 to Rs 999 for unlimited usage. It also offers 60 live television channels.

‘We did not receive 2G notice’

SSTL’s chief sales officer Atul Joshi said the company had not received any notice from the Supreme Court or the Telecom Regulatory Authority of India regarding the controversy around 2G spectrum allocation in 2008. It was reported in January that SSTL, apart from the Trai and 10 other operators, has been issued notice by the apex court for allegedly not meeting their roll-out obligations.