Russian diplomats might swing case for SSTL

28 Mar 2012

Following talks between Indian and Russian government officials yesterday, the revocation of licences held by Sistema Shyam Teleservices Ltd (SSTL, the Russian government holds a stake in SSTL through majority owner Sistema) may be reconsidered, or treated separately from the other withdrawn licences, reports the Hindu Business Line, citing ‘official sources’. SSTL had its licence cancelled when the Supreme Court annulled 122 concessions in February this year, on the grounds that the licences issued in 2008 had been allocated illegally, as the ‘first come, first served’ policy had not been enforced. However, as the only applicant for CDMA spectrum, Sistema claims that it would have been awarded the concession even if correct procedures had been followed. A possible compromise, in the form of a restricted auction was reportedly proposed: the tender for CDMA spectrum would be limited to the new entrants, giving the Russian-backed cellco a chance to buy back the spectrum at a lower cost.

As previously noted by CommsUpdate, Sistema has threatened that if the matter is not resolved amicably by 28 August, it would launch legal proceedings against the Indian government before an international tribunal. The telco said that India had breached the terms of the Bilateral Investment Treaty (BIT) signed by Russia and India, which protects investments, and obliges the governments not to expropriate assets.