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Sistema Shyam bags spectrum in 8 circles for Rs 3,639 crores

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V&D Bureau
New Update

Sistema Shyam TeleServices (SSTL) that provides telecom services under brand MTS today won spectrum in the 800 MHz band in eight circles for Rs 3,639 crores.

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The circles won by MTS India include Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) and West Bengal.

The company's operational footprint also include Rajasthan circle which was not affected by the honorable Supreme Court of India's order dated 2nd February ‘2012. While bidding for spectrum in the auctions, MTS India considered a range of variables including spectrum pricing, number of carrier slots available, levels of competition, future data potential in the circles etc.

The company has won 3 carrier slots of 1.25 MHz each in 9 circles (including Rajasthan) to enable MTS India to service 40 percent of country's population.

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Based on such criteria, the company also decided not to bid for Mumbai, Maharashtra and UP (East) circles and would be immediately initiating the process to inform its customers in 3 circles to port out to other telecom operators of their choice.

 

Vsevolod Rozanov, president & CEO, Sistema Shyam TeleServices said "Given the range of variables we have considered and the spectrum cost for 800 MHz, it was a big challenge to arrive at a core list of 8 circles and to bid accordingly. With Rajasthan circle also a part of MTS India's footprint, we would be able to service 40 percent of country's population, address over 60 percent of data business potential, safeguard 75 of our current revenues and significantly optimize our losses."

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Our go forward plan includes building an even stronger MTS brand in the country by focusing on our data centric-voice enabled strategy added

Vsevolod.

The spectrum won by SSTL in eight circles is technology neutral and would be valid for 20 years. The company would be required to pay Rs 3,639 crores for the license period. The terms include payment of 25 percent of the final bid amount within 10 days, followed by a payment moratorium until March 2016, after which the balance amount will be paid in 10 equal annual instalments.

The government of India has confirmed that SSTL will be able to set off the previous license cost of Rs 1,626 crores against the new spectrum cost.

As of 28th Feb 2013, SSTL has on rolls employee count of about 2,850 out of which 15 percent are employed in the 3 circles where the company decided not to bid and would therefore be affected. Full efforts are being made to absorb maximum number of employees in other circles.

In-addition, care is being taken to place some of the employees in other companies. The company will also be closely working with all its local partners to address their concerns. SSTL has a customer base of over 12.1 million, out of which 13 percent come from the impacted circles.

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