Sistema is in talks with Reliance Communications to sell its Indian telecom business MTS (Sistema Shyam Teleservices).
MTS India has nearly 9 million customers from 9 telecom circles and less than a 1 percent market share. Sales of MTS India increased 10 percent in 2014 to $212 million. MTS India reported net loss of INR 16.38 billion against INR 26.9 billion loss the previous year.
Reliance Communications is India’s fourth-largest carrier, with its 109 million customers accounting for 11.3 percent of the market at the end of March. Reliance Communications has nearly $6 billion of debt. Top three telecom service providers are Airtel, Vodafone and Idea Cellular.
Bloomberg and Reuters reported that Russian billionaire Vladimir Yevtushenkov, owner of Sistema, has held talks with Anil Ambani, the promoter of Reliance Communications, about a possible joint venture in India.
Reuters reported that Yevtushenkov said he had no plans to sell his Indian telecoms business. They are looking at a merger with share swap. It is currently evaluating several options and talks are on with many companies.
MTS has stopped investing significantly in telecom infrastructure in India ever since it was forced to scale back its operations in 2013 when it had to buy new telecommunication permits after its earlier permits were cancelled by a Supreme Court order linked to a 2G licensing scandal.
“We’ve been talking to different people regarding business expansion,” Yevtushenkov told Reuters, in response to a query about a media report. “Honestly, there is nothing much to say.”
Earlier, there were media reports about small telecom entities such as Tata Teleservices, Aircel and Telenor talking to MTS to acquire or merge the mobile business.
Both MTS India and Reliance Communications are a strong data strategy to drive revenue growth. Non-voice revenues of MTS India grew 11.5 percent in Q4 2014. Its data card subscriber base rose 10.3 percent to 1.6 million subscribers. MTS India said non-voice revenues contribute 46.9 percent of revenues.
Baburajan K
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