Russian telecoms giant Sistema has announced that the Government of the Russian Federation has approved an equity investment in Indian mobile network operator Sistema Shyam TeleServices Ltd (SSTL). Under the plan it is understood that the Russian government, represented by the Federal Agency for State Property Management (Rosimushchestvo), will take part in the issuance of additional shares by SSTL, paying around USD600 million for its stake; the payment will be made in the form of Indian rupees held in accounts representing Indian governmental debt to the Russian Federation. Any transaction will still be subject to the necessary regulatory and corporate approvals.
With reports of the Russian state investing in the cellco as far back as March 2009, SSTL has previously said it plans to use the monies generated by the share issuance to help develop a number of its areas of operation including: the reinforcement of its position in the wireless broadband sector; the expansion of its retail network; and the accelerated launch of operations in a number of new circles.
According to TeleGeography’s GlobalComms Database, SSTL, which offers services under the MTS India banner, holds a nationwide Unified Access Service Licence (UASL), but has only launched in twelve of India’s telecoms circles so far. At end-June 2010 its subscriber base stood at 5.14 million, up from 1.3 million a year earlier.