Sistema, a large publicly-traded diversified holding company in Russia and the CIS, announced yesterday that the its Indian telecom subsidiary, Sistema Shyam Teleservices Limited (SSTL) has won a spectrum in the 800 Mhz band in 8 circles following its participation in a licence auction.
The circles won by SSTL include Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala and Uttar Pradesh (West) & West Bengal, as well as the Rajasthan circle.
When bidding for the spectrum, however, SSTL decided not to bid for Mumbai, Maharashtra and Uttar Pradesh (East) based on technical and economical considerations. The company will close operations in those circles. As a result, SSTL’s final footprint will include 3 carrier slots of 1.25Mhz each in 9 circles, servicing 10.45 million of its customers.
For the 8 circles won by SSTL in the spectrum auctions today, which account for over 60% of the current data market in India, the company is required to pay a total of approximately $665 million for a license period of 20 years.
The Indian government has confirmed that SSTL will be able to set off a previous licence cost of approximately $297 million against the new spectrum cost.
The spectrum in eight circles is technologically neutral and is valid for 20 years. “This provides an opportunity to strengthen SSTL’s data driven strategy through a possible LTE roll out in the future,” Sistema stated.
“Today’s news is an important result which highlights the success of our strategy as SSTL’s operations will now focus on the most prospective regions, servicing 40% of the country’s population, amounting to over 60% of the data market whilst also maintaining 75% of the company’s revenues. Crucially, this outcome results in no upfront cash licence cost, substantially reduced operating losses and a clearer roadmap for SSTL’s profitability,” Sistema’s President and CEO Mikhail Shamolin commented.
Source: Sistema
