MTS, the telecom brand owned by Sistema Shyam (SSTL) will not provide services in Mumbai, other parts of Maharashtra and Eastern Uttar Pradesh. The joint venture of Russia’s telecom giant Sistema and India’s Shyam Teleservices, which participated in the second round of fresh spectrum auctions won its bid to operate in 8 out of 11 circles it bid for. [Source]
With this SSTL reduced its pan-India operations from 22 circles to 9.
SSTL bought spectrum in the 800 MHz band in 8 circles including Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) and West Bengal for Rs 3,639 crore from the Government. SSTL was the only bidder.
SSTL’s decision to scale down operations will affect up to 25% of company’s revenues and limits its subscriber base to just over 10 million across the remaining 9 circles. However with 8 new bidded circles SSTL can consolidate its business as these circles contribute high revenue.
Currently more than 60% of current data market in India come from these circles. The spectrum in 8 circles is technologically neutral ,which essentially means Sistema can deploy even 3G or 4G services on these airwaves.
The possible rollout of 4G by the company will boost SSTL’s data-driven strategy in 9 circles. Additionally, Russian major Sistema’s claim under the bilateral investment protection treaty is alive under which it can claim compensation for cancelling its licences.