Oct. 22, 2009 (The Hindu Business Line) --
“The Russian Government has done the evaluation and technically allocated money in the budget. But they haven’t made the decision to buy,” said Mr Vsevolod Rozanov, President and Chief Executive Officer, SSTL. “They may decide before the end of the year,” he added.
Russian firm Sistema owns 74 per cent in SSTL, while the Shyam Group holds the rest. Reports earlier said that the Russian Government may pick up a 20 per cent stake in SSTL for close to $600 million. The deal between the Moscow-based Sistema and the Russian Government is being seen as part of a bailout package to help the company service its debts.
SSTL, which currently operates in seven circles with 2.3 million subscribers, plans to roll out its services in Karnataka next week. In 2008, Sistema Shyam entered into a tie-up with Russia’s Mobile TeleSystems (NYSE:MBT) to launch mobile services under the MTS brand in India. SSTL, which uses CDMA technology, has no plans to offer mobile services under the GSM technology, Mr Rozanov said.
The company has earmarked $100 million as capital expenditure over five years for roll-out of its operations in Karnataka, where it would largely share base transceiver station or cell towers with other operators. SSTL also expects to offer high-speed Internet services in Bangalore, Mangalore, Mysore and Belgaum.
Pan-India rollout
Mr Rozanov said the company expects to complete the pan-India rollout by the end of 2010. Of the $5.5 billion earmarked for India operations, SSTL has already invested over $1.5 billion for starting operations in seven States. SSTL is looking at breaking even at the operating level in the next three years on a subscriber base of 30 million, Mr Rozanov said.
