Sistema to exit India if government accepts TRAI’s proposals (Russia)
Telecom operator Sistema Shyam has threatened to pull out of India if the government accepts the telecom regulator’s latest proposals to auction CDMA airwaves at a significantly higher price, a 14-fold increase over what it paid in 2008, according to a report by ET.
As per the report, a senior board member from the oil-to-telecom conglomerate Sistema JSFC said it will have to bow down to pressure from its investors and not bid in the upcoming auctions in India, where it has invested more than $3 billion after buying a controlling stake in Shyam Telelink, now called Sistema Shyam, in 2008.
Andrey Terebenin said that if the government rubber stamps these Trai recommendations, they will pull out, implying that his company will not bid in the upcoming auctions. Terebenin is in India to meet Indian government officials. He went on to add that Trai’s recommendations were being perceived as a coded message to create a situation where no new entrants can come in the telecom sector. He said he was absolutely sure that no new entrant would be able to make a viable business case with the prices suggested by Trai.
The report reveals that Terebenin added that Sistema was under extreme pressure from investors in the US and UK to exit India since they had initially cautioned against investing here because of the difficult business climate.
Sistema threatens to begin legal proceedings against India (Russia, India)
Public financial corporation Sistema, had sent a formal notice to the Republic of India notifying it of a dispute under the Bilateral Investment Treaty (BIT) between the Government of the Russian Federation and the Government of the Republic of India arising from the decision of the Supreme Court of India issued on February 2, 2012 regarding the cancellation of 122 2G telecom licenses, including 21 licenses belonging to Sistema Shyam TeleServices Ltd (SSTL), in which Sistema owns a 56.68 per cent share.
Sistema believes that the cancellation of SSTL’s licenses following Sistema’s investment of billions of dollars into the Indian cellular sector is contrary to India’s obligations under the BIT, including obligations to provide investments with full protection and security and obligations not to expropriate investments.
The formal notice requests The Republic of India to settle the dispute relating to the revocation of SSTL’s 21 telecom licenses in an amicable way within six months. If the dispute is not amicably resolved by August 28, 2012 Sistema reserves the right to commence proceedings against The Republic of India as provided in the BIT.
According to reports, Indian Finance Minister, Pranab Mukherjee, said that Sistema has stated that in case the dispute (regarding 2G issue) is not settled amicably through Conciliation by August 28, 2012, Sistema reserves its right to commence proceedings against India on the basis of any applicable intergovernmental investment treaty.
MTS Mikhail Shamolin resigns as CEO (Russia)
MTS’s current CEO, Mikhail Shamolin is stepping down from the role as he is expected to be appointed to the position of President and CEO of Sistema at its board meeting. Sistema is the controlling shareholder in MTS.
Shamolin is being replaced by the current head of MTS Ukraine, Mr. Andrei Dubovskov, who takes up the role with immediate effect.
Mr. Dubovskov joined MTS in 2004 as head of the Company’s operations in Nizhny Novgorod. In the beginning of 2008, Mr. Dubovskov became Head of Business Unit MTS Ukraine, the Company’s second largest business unit in terms of revenues.
According to Mr. Ron Sommer, Chairman of the Board of Directors of MTS, they are grateful to Mikhail for the tremendous amount of work he put in and the results that were achieved under his leadership. He was instrumental in making MTS into an integrated player through the implementation of the 3i Strategy. The Board has full confidence that Andrei will continue Mikhail’s undertakings in executing on the strategic priorities of the company as it looks to extract further growth from the Russia and CIS markets of operation. Andrei’s wealth of experience in the telecommunications industry and at MTS itself provides him with the necessary skill set to take MTS to even greater heights. On behalf of the Board, he welcomes Andrei to his new position.
Following Mr. Dubovskov’s appointment, Mr. Vasyl Latsanych, the Chief Marketing Director of Business Unit MTS Ukraine will be the acting Head of Business Unit MTS Ukraine.
MTS in merger talks with unnamed companies (Russia)
Russia’s MTS has confirmed that the company is in talks with other telecoms networks for a possible merger, without naming any of the potential partners.
Vladimir Yevtushenkov, the CEO of MTS’s controlling shareholder, Sistema confirmed the talks.
MTS chief executive Mikhail Shamolin had previously suggested that the company would be interested in buying out South Korea based Korea Telecom’s 80% stake in Russia-focused New Telephone Co., but that would not give the company the international scope it has long craved.
Last year, it was rumored that the Sistema Group was looking to buy the Telekom Austria Group in a deal worth in excess of US$6 billion. The Austrian state owned holding company, OeIAG holds 27% of the company, and previously looked to sell the stake.
Telekom Austria has operations in Austria, Bulgaria, Croatia, Slovenia, Liechtenstein, Serbia, Macedonia, Belarus and Czech Republic. MTS also operates in Belarus, and the local government would almost certainly require that MTS sells one of its two networks in the country if it were to buy Telekom Austria.
MTS and its subsidiaries in Armenia, Belarus, Ukraine and Uzbekistan currently have over 108 million subscribers.
MNP to start from Jan 20: Sibal (India)
The new Telecom Minister Kapil Sibal has announced that the much-awaited mobile number portability (MNP) will be available to more than 700 million Indian subscribers from January 20, 2011.
MNP is a service that allows subscribers to change service providers while keeping the same number.
According to Kapil Sibal, mobile number portability that they have introduced in Haryana will be available on January 20 across the country next year . As per Telecom department officials, BSNL customers had switched to Idea Cellular and used their examples to demonstrate this facility during the launch.
Mobile phone users in Haryana will be able to switch among nine operators — Airtel, Idea Cellular, BSNL, Aircel, Loop, Vodafone, Etisalat, Sistema and Videocon. The customer has to pay a maximum of Rs 19, the lowest in the world, to migrate to a new mobile phone company.
MTS offers Sistema to sell Sistema Telecom
Sistema has received an offer from Mobile TeleSystems (MTS) to sell 100 percent of shares of Sistema Telecom to the mobile operator for RUB 13.389bn (approx. USD 431m), the telecommunication corporation’s press office reported today.
The amount of the potential deal includes the company’s share capital of RUB 11.588bn (approx. USD 373m) and net debt of nearly RUB 1.801bn (approx. USD 59m). MTS also indicated that Sistema Telecom’s debt included its liabilities to mobile operator’s subsidiaries in the amount of RUB 1.35bn (approx. USD 44.04m).
If the deal does in fact go through, on the date of the deal’s completion, Sistema Telecom will become the owner of the rights to trademarks, including those of MTS, Comstar-UTS and MGTS (Moscow City Telephone Network), a 45-percent stake in TS Retail and promissory notes worth RUB 2bn (approx. USD 64.4m) issued by MTS.
According to Sistema, the deal is expected to be closed by the end of the year, provided that it receives all the necessary corporate and anti-trust regulator’s approvals.
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Sistema Shyam (MTS) to invest USD 55 Mn
Sistema Shyam TeleServices Limited (SSTL), a joint venture company between Russia’s Sistema and Shyam Group of India, will be investing USD 55 Mn to expand its code division multiple access (CDMA) network in one of the southern states in India (Andhra Pradesh) by the end of this year.
MTS India has successfully launched in 12 circles now and MTS India CEO, Vsevolod Rozanov, said the plan for this year was to complete all the 22 circles with an investment of over USD 1.1 Bn.
Currently, MTS India has 4.5 million subscribers, including 72,000 for high-speed data services. Data is the future of our company and is clearly a differential business model than other aggregators. We expect data services to account for one-third of our revenues and achieve break-even by 2013,†Rozanov told Business Standard in India.
Replying to a query, Rozanov said the company would switch to another vendor if China-based Huawei Technologies’ products were not allowed into India.
It may be recalled that the Indian government has blocked Huawei Technologies and ZTE Corporation from selling telecom network equipment to domestic phone carriers due to security reasons.
Telekom Austria eyed by Sistema
www.WirelessFederation.com/news: Sistema, Russian telecommunications holding company, is seeking to bid to acquire Telekom Austria. Vladimir Yevtushenkov, who is the main owner of Sistema would be prepared to pay much more than the current share price, which values Telekom Austria at EUR 4.5 billion.
27 percent of Telekom Austria is currently held by Austrian state holding company Oeiag. However, any legal permission to sell its share is denied by Oeiag as a result of which it is unable to be in talks to sell Telekom Austria shares.
Telekom Austria has mobile operations in Bulgaria, Croatia, Slovenia, Liechtenstein, Macedonia, Serbia and Belarus. Sistema which has operations in Russia, Ukraine, Uzbekistan, Turkmenistan, Armenia and Belarus is among others owner of Russia-based mobile operator MTS.
SSTL targets profitability within three years (India)
www.WirelessFederation.com/news: Profitability is seeked to be achieved by Indian mobile network operator Sistema Shyam Teleservices (SSTL) within three years. SSTL is a joint venture between Russian mobile giant Sistema and India’s Shyam Telecom.
According to Vsevolod Rosanov, president and CEO of SSTL, the company is hoping to become earnings before interest, depreciation, tax and amortization (EBIDTA) positive by 2012-end or early 2013.
n March 2008, a pan- India license was acquired by SSTL and the telco is expecting to launch its commercial services in all 22 of the country’s telecom circles by the end of this year. While no subscriber targets has yet been announced by SSTL, it has been noted that to reach profitability the company would need to have approximately 30 million customers.
Until end-December 2009, SSTL had signed up 3.09 million subscribers.
3m subscribers mark surpassed by MTS India
www.WirelessFederation.com/news: With 3 million subscribers, Mobile operator MTS India’s recorded 15 percent per month on average. Until May last year, the company reported 1 million subscribers while in September, it had 2 million users.
Rajasthan, West Bengal and Tamil Nadu were the fastest growing market of MTS. Tamil Nadu counts close to 500,000 MTS subscribers; Rajasthan MTS has over 1.2 million subscribers, while Kolkata and West Bengal accounted for over 700,000 subscribers. Even Karnataka and Delhi/NCR telecom circles attracted over 150,000 subscribers in the last quarter of 2009.
CDMA services under the MTS brand was launched by Shyam Teleservices, a JV between Russia-based Sistema and India’s Shyam Group in September 2008.
