SSTL expects up to USD800 million investment fund from Russia

13 Apr 2010

Sistema Shyam Teleservices (SSTL), which operates under the MTS India banner, has said that it expects the Russian Federation to invest as much as USD800 million as part of proposals that will see the cellco divest a 20% stake to the latter. According to the Business Standard, SSTL said the bulk of the funding would be put toward the expansion of its coverage area, including inaugurating services in the eleven circles which it holds licences for but does not yet operate in; the revelation comes as SSTL announced that it has begun commercial operations in the Haryana telecoms circle. It has been confirmed that the Foreign Investment Promotion Board (FIPB) has given clearance to the proposals, and due diligence is already underway by the Russian government; a deal could be completed as soon as three to four months from now, according to SSTL’s deputy CEO T. Narasimhan. Commenting on the operator’s plans for expansion, Narasimhan noted: ‘We have plans to roll out our services in remaining eleven circles of India in next 12-15 months. Already we have invested USD1.5 billion in rolling out our services in eleven circles and further plans to infuse USD1 billion in expanding our network to another eleven circles. We expect that we would have a subscriber base of 15 million after completion of national rollout. Also, we would be able to reach break-even by 2013.’

SSTL, a joint venture between Russia’s Sistema and the Shyam Group of India, holds a pan-India mobile licence, and according to TeleGeography’s GlobalComms Database it had signed up just over three million subscribers by end-December 2009, after just over one year in operation. Following the launch in Haryana, SSTL offers its CDMA-based mobile services in a total of eleven circles: Rajasthan, Bihar, Calcutta, West Bengal, Tamil Nadu, Kerala, Karnataka, Mumbai, Maharashtra, Haryana and Delhi.

India, Sistema, Sistema Shyam TeleServices (SSTL, MTS India)