Shyam Teleservices to increase foreign stake beyond 74%

NEW DELHI: Sistema Shyam Teleservices (SSTL) will clarify all points raised by the government while resubmitting by early April its application to raise foreign ownership in the company beyond 74%, a top company executive said.
The Foreign Investment Promotion Board (FIPB) had last September turned down SSTL's proposal to raise foreign holding beyond the current 74%.The initial proposal had hit a hurdle over confusion about the proposed mode of investment.
The Department of Telecommunications had said that the plan would need approval from the Reserve Bank of India, and not the department, as it had been structured like an overseas debt deal and not foreign direct investment.
"The company is currently in the process to submit clarifications to the FIPB observations. We will take up our application with all clarification to the board sometime early April 2015," Executive Director Neera Sharma told ET. "We have got all aspects such as fund structuring explained and will make our representation."
Russia's Sistema JSFC and the Russian government collectively hold nearly 74% in Sistema Shyam. If the FIPB clears SSTL's fresh application, it will enable the Russians to buy out Indian partner Shyam Telecom, which holds the remaining stake. UK's Vodafone and Norway's Telenor fully own their Indian units.
Sharma was speaking to ET on a day the company, which operates under the MTS brand, declared the fourth-quarter and annual results. Its net loss for the quarter widened from a year earlier, hurt by higher sales and marketing costs and forex losses. Revenue rose 17% as subscribers used more of its premium data services.
For the full year, net loss narrowed to Rs 1,638 crore fromRs 2,694.2 crore in 2013, while revenue rose 10%.
The company operates CDMA-based services in nine telecom circles under the MTS brand. It expects data revenue to be as much as 50% of total revenue by the end of 2015.
Sistema isn't participating in the ongoing sale of airwaves, citing high base prices. As a result, it needs to figure out ways to get more airwaves to offer 4G services, deepen its existing services in its own and new circles, and would look towards trading and sharing of airwaves, which though aren't allowed as yet.
"Given the success of the spectrum auctions, we now look forward to the government to bring out a clear roadmap on spectrum sharing and trading," India CEO Dmitry Shukov said.
Sistema has intra-circle roaming pacts with Reliance Communications and Tata Teleservices.
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