Russia to buy 20 per cent in Sistema Shyam
09 September 2010
The Russian government has decided to purchase a 20 per cent stake in telecom services company Sistema Shyam TeleServices, the company announced on Wednesday. It is expected that Russia will participate in an issuance of additional shares of SSTL, paying $600 million (about Rs2,760 crore) held in accounts representing Indian governmental debt to the Russian Federation.
''The issuance of shares to the Russian government is subject to the receipt of necessary regulatory, corporate and shareholders' approvals,'' it said in a release.
SSTL, which offers CDMA-based mobile services in India under the MTS brand, plans to use the funds finance continued development of the company's activities, particularly in the reinforcement of its leading position in the area of wireless broadband internet coverage, expansion of its branded retail network in its current telecommunication circles and the accelerated launch of operations in new circles.
''We plan to use the funds to accelerate our services rollout, increase wireless broadband coverage and expand our branded retail network,'' SSTL president and chief executive officer Vsevolod Rozanov said.
Pan-India licence-holder SSTL is 73.71 per cent owned by Russia's Sistema, while India's Shyam Group holds around 23.79 per cent. The company has till now invested about $1.5 billion (about Rs7,000 crore) since its launch in India.
Currently, SSTL has a shade over 6 million customers and offers mobile services in 12 of the 22 circles in the country. ''We plan to expand our footprint to 15 circles by calendar 2010 end,'' Rozanov said. It will be launching its services in three more circles - east and west Uttar Pradesh and Gujarat – by that time.