Sistema in talks to acquire Aircel for $3 billion?

Telecom Lead India: Sistema is in talks to acquire controlling stakes in Aircel for $3 billion (Rs 16,000-17,000 crore), according to Economic Times.

Sources familiar with the development said Sistema would buy into Aircel’s parent company based overseas with rights to have the Indian arm transferred to it after an ongoing restructuring process is completed.

ET quoted Sistema Shyam TeleServices sources who said the talk of engaging with other telecom service providers for a possible deal was motivated.

However, the Sistema  made a statement soon after the news was released.

“Sistema Shyam TeleServices Ltd would like to categorically state that there are no plans of acquiring any telecom service provider. We also believe that such talk is based on sheer speculation,” the company said.

Malaysia’s Maxis Communications owns 74 percent stake in Aircel through multiple entities.

The deal would be a breather for Sistema in India that has lost its license following the Supreme Order cancelling the licenses granted by former telecom minister A Raja in 2008. It will remove the uncertainty surrounding the company’s operations in India following the cancellation of spectrum licenses.

Sistema offers CDMA-based mobile services in India under the MTS brand.  However, Aircel operates on GSM platform.

In fact, Sistema recently disclosed its strong stand on spectrum-related issues with the government.

Sistema to focus on resolving issues surrounding Indian telecom operations, says CEO

Sistema will focus on resolving the issues surrounding Indian telecom operations, said Mikhail Shamolin, president and chief executive officer of Sistema, after announcing the company’s second quarter results.

“Auction prices announced by the regulator are unjustifiably high and no decision on auction participation will be taken until our case is heard in our Curative Petition to the Supreme Court,” Shamolin added.

Sistema revenue was down by 6.3 percent YoY to US$ 8.1billion in the second quarter ended June 30, 2012, primarily due to rouble depreciation against the US dollar by 10.8 percent Y-o-Y.

Meanwhile, MTS India posted 2.6 percent increase in revenue q-o-q to INR 4,177 million in the second quarter ended June 30, 2012. On y-o-y revenues grew 50 percent.

The revenue growth was driven by 41 percent increase in subscriber base over Q2 2011. Its subscriber base grew by 4.9 percent to 16.60 million during the quarter.

During the announcement Shamolin said Sistema is in the process of realizing some of the deals in a number of sectors.

Experts believe the deal with Aircel would prove better for Sistema than participating in the upcoming spectrum option. However, since Aircel operates on GSM networks, Sistema will have to buy fresh CDMA spectrum to continue serve its customers. According to sources familiar with the deal, the transaction was being structured in such a manner that it would enable Sistema’s Indian arm to bid for CDMA airwaves.

[email protected]