Russia to invest $600 mn in Sistema India unit by Oct

Russia to invest $600 mn in Sistema India unit by Oct
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First Published: Wed, Jun 23 2010. 01 29 PM IST
Updated: Wed, Jun 23 2010. 01 29 PM IST
New Delhi: Sistema Shyam Teleservices, the Indian arm of Russia’s Sistema, expects the Russian government to make its $600 million investment in the company by October, a top official said on Wednesday.
The Russian government will get a 20% stake in Sistema Shyam, which holds telecom licences for the whole of India, as a result of the investment, chief executive Vsevolod Rozanov told reporters.
“Our immediate funding requirements will be taken care of with this investment,” Rozanov said.
Sistema owns 73.71% of the Indian firm, while Shyam Group owns the remainder in Sistema Shyam Teleservices. After the issue of shares to the Russian government, Sistema’s stake will be diluted to 54%.
Russian Prime Minister Vladimir Putin had in March this year pledged state financial aid for Sistema Shyam.
Rozanov said Sistema Shyam would turn Ebitda positive in 2013, though mobile call tariffs were expected to fall further.
The entry of new players has crowded India’s telecom space and made it fiercely competitive, leading to dramatic fall in mobile phone tariffs and hit mobile operators’ profitability.
India’s telecom regulator has also called for consolidation in the sector.
Last month’s third-generation (3G) spectrum auction also saw bidding far exceed expectations. Bharti, Vodafone and Reliance Comm paid about $7 billion in total for 3G spectrum in that auction.
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First Published: Wed, Jun 23 2010. 01 29 PM IST