Sistema Shyam looks at merger plans in India

Sistema Shyam Teleservices is all set to merge with one of India's top seven telecom operators provided it gets a say at the management level. However, to take a step in that direction the company is awaiting clear merger and acquisition regulations from the government. The company is a joint venture between Russian conglomerate Sistema and Shyam Teleservices of India. It is the only company in India that operates on only code division multiple access (CDMA) technology.

Some chatter emanating out of the Department of Telecommunications suggests the government may impose a charge for additional spectrum to make up for allotting it too cheap initially. The talk comes in the wake of the alleged 2G scam which a government report says cost the exchequer up to 1.76 lakh crore. A additional cost will take a toll on Sistema Shyam's business objectives. The target is to be Ebitda (a measure of operating profit) positive by 2013 but that is already extremely stretched. If something (fees) else is imposed, the payback will be extended for many years.