4G services: Sistema Shyam to invest Rs. 1,100 crore in India

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New Delhi: Sistema Shyam Teleservices (SSTL), which operates under the MTS brand, today said it will start 4G services in India with fresh investments of around $200 million (about Rs. 1,093 crore).

The Indian arm of Russian conglomerate Sistema said, however, that it will not start investing in the 4G LTE (long- term evolution) services this year.

“SSTL now has an enhanced network, which will deliver excellent quality and a clear roadmap to LTE (4G). Our network is easily upgradable with likely expenditure being $200 million spread over several years,” SSTL president and CEO Vsevolod Rozanov said today.

Sistema, which provides mobile services based on CDMA technology, said it expects that the 4G services network will cost it around $300 million, which will include support of around $100 million from the existing infrastructure.

On the time frame for investments in the LTE services, Rozanov told PTI: “It’s (LTE) not going to start this year. So speaking about the future, it will be spread over three or four years.”

He said the services will be focused mainly on tier-2 and tier-3 cities.

SSTL recently won three blocks of 1.25 MHz each in eight telecom circles: Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) and West Bengal for Rs. 3,639 crore.

It already has operations in Rajasthan circle. The firm has plans to deploy a version of 4G technology which can work only in 1.4 MHz of airwaves frequencies.

The company has a total of 10.58 million subscribers.

SSTL, which entered India in 2008, has invested around $3.6 billion (over Rs. 19,000 crore at exchange rate of Rs. 55) in the India.

It expects to reach break-even in six out of the nine circles by end-2014 or the first half 2015, Rozanov said.

“Another key consideration was to remain in circles with early OIBDA break even. This is a key objective for SSTL in the immediate term and we believe we can achieve this by end of 2014 or first half 2015. Six out of nine circles should reach OIBDA (operating income before depreciation and amortisation) break even in mid-2014,” Rozanov added.

He said that the company has already achieved OIBDA break even in West Bengal in the last quarter which ended on March 31, 2013.

SSTL last week reported reduction in net income losses at Rs. 778.7 crore for the three months period ended December 31, 2012. It had net loss of Rs. 1,197.7 crore during the same quarter a year ago.

The OIBDA loss of the company almost halved to Rs. 278.6 crore during the reported quarter, from Rs. 569 crore in previous fiscal year which ended December 31, 2011.

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