Sistema Shyam Teleservices’ MTS CDMA mobile services in Maharashtra, Delhi soon
After launching its CMDA mobile services in Kolkata on May 21, 2009, Sistema Shyam Teleservices (SSTL), a joint venture between Russia’s Sistema and the Shyam Group, now plans to extend its services to Gujarat, Maharashtra, and Delhi.The company is aiming for a 10% market share in the Indian mobile sector in the next five years and as a part of its 22-circle expansion plans.
“We intend to cover one circle per month. After West Bengal, we will enter Bihar and Jharkhand, followed by Maharashtra, Delhi and Haryana by December this year,” Rozanov said.
The company already provides services in Kolkata, Tamil Nadu, Kerala and Rajasthan under the MTS band and has as many as 9, 20,000 subscribers already.
“SSTL is targeting around 35-40 million subscribers in five years. We plan to start services in 2-to-3 new circles every quarter,” Vsevolod Rozanov, president and chief operating officer, Sistema Shyam TeleServices, said.
The company will now focus only on CDMA in order to provide cost competitive services in India.
The company plans to launch its services in Delhi by August 2009, and in Maharashtra by December 2009. The company also plans to launch its services in Gujarat soon, but the exact date is yet to be announced.
The company also to increase its total headcount to 8,000 from the current 1,500 people working for it.
Meanwhile, the Russian government will buy equity worth $670-700 million in Sistema Shyam TeleServices Ltd.
Rozanov clarified, “The Russian government has already approved infusing about $670 million. We are negotiating with the government regarding the stake sale and valuations.”
“After we get the approval, we will seek Foreign Investment Promotion Board (FIPB) clearance in India,” he further explained.
This way Sistema will lose 20 percent of its 74% stake and the Shyam group will maintain its 23.5 % stake.
The company plans to invest about $5.5 billion in India as its capital expenditure. About 40% of this amount will be generated through equity participation by the Russian government and the two companies.
The company has already invested about $1.2 bn in India in infrastructure and spectrum allocation.
Other than Sistema, Aircel, a joint venture between Malaysia’s Maxis Communications and Apollo Hospitals also aims to start its telecom services in Gujarat.
“The entry of two new players will certainly intensify competition in Gujarat leading to a further growth in the subscriber base,” The Times of India quoted a a regional head of a cellular company as saying.
Aircel has already captured 17 circles and expects to extend its presence in 13 more circles across India.