Sistema Shyam working on operational models to ensure MTS brand’s continuity, after $3.2 billion spend

Telecom Lead India: Sistema Shyam Teleservices (MTS India) said it is working on operational models and other plans to ensure MTS brand’s continuity in Indian mobile market.

MTS India, whose telecom licenses were cancelled, did not participate in the 2G spectrum auction. It is reportedly in talks with Maxis-owned Aircel for a merger / buy out.

On Monday, MTS India said it has taken all the necessary legal steps within the four corners of the Indian Judicial system to safeguard its interest.

Operational models are important to sustain in the market as SSTL is currently serving more than 16 million customers and employing over 7,000 (Direct and Indirect) employees.

As part of the same strategy, SSTL on 4 May 2012 filed a Curative petition in the Supreme Court. The company has consistently maintained that being a pure play CDMA operator, its legal case is significantly different compared to the other mobile operators. For example, there is no finding or suggestion by the CAG report that CDMA spectrum was equally or anywhere near in demand as GSM back in 2008.

SSTL believes that it has a strong case and is determined to await its hearing. Given this context, and also considering the level of recommended spectrum prices, SSTL had no choice other than not to take part in the 2G auctions for 800 Mhz. The Company is hopeful that the highest court of the land will speedily look into the merits of its case and will give it justice.

Sistema JSFC, the majority shareholder in SSTL, had also invoked its right under the Bilateral Investment Treaty (BIT) between India and Russia, after the decision of the Supreme Court. Communication exchanges continue between Sistema JSFC and the Republic of India. This is a part of the conciliatory process as per the provisions of the BIT.

“The SSTL management has the intent to continue its operations in India. The Company is hopeful that its curative petition will lead to a favorable outcome. Alternatively, the company is working on other plans and operational models to ensure the continuity of brand MTS in the country,” said MTS India in a statement. on Monday reported that India Government should refund Capex spent of around $6.5 billion to Videocon, Uninor, S Tel, Etisalat, Loop, MTS and Tata Teleservices (TTSL)?

The refund of their investment in telecom network is important as the government is currently planning to refund spectrum fee paid in 2008 to companies who have won in the 2012 auction. What about other mobile operators and their investments in India.

The Videocon and Uninor brands will disappear from a part of the Indian telecom market after the flopped 2G auction that generated Rs 9,400 crore for the Government against the Rs 40,000 crore target.

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