INDIA BUSINESS WORLD SEPTEMBER (16^th - 30^th) 2007
The Month that was ...

RUSSIAN TELECOM FIRM SISTEMA TAKES 10% IN INDIA'S SHYAM TELELINK

RUSSIAN telecom firm Sistema has finally got a foothold in India - the company has picked up 10% stake in Shyam Telelink, which offers CDMAbased mobile services in Rajasthan, for $11.4 million. Sistema said that it intends to increase its stake in Shyam to 51% after receiving approval from the Foreign Investment Promotion Board (FIPB) of India. If it goes through, the overall value of the deal may reach $58.1 million.

Earlier, Sistema had tried to pick up a stake in Aircel Cellular, but the deal fell through. It was also in the race for Hutchison's stake in Hutch-Essar.

In a related development, Shyam Telelink has also applied for mobile licences, also called Universal Access Service Licence, across the country.

Commenting on the development, Shyam group chairman Rajiv Mehrotra said: "This relationship would not only give Shyam Telelink an edge to compete in the competitive Indian market but would also bring new services and practices to benefit the Indian consumers."

Sistema, which was founded in 1993, is the largest private sector consumer services company in Russia. Sistema, along with its subsidiaries serve over 80 million consumers in Russia, the CIS and Eastern and Western Europe. In a statement, Sistema president and CEO Alexander Goncharuk said: "The acquisition of the stake in Shyam Telelink is in line with our strategy to enter rapidly developing markets and further integrate Sistema in the global business community. We consider India as one of the most attractive markets with a high growth potential."

Shyam Telelink has an unified licence to provide both fixed-line and mobile in Rajasthan. According to figures from the industry associations, as of August-end, Telelink had a total of 2,57,108 subscribers. Telelink also has a 100% stake in Shyam Internet. Its physical infrastructure also includes 4,000 km of fibre-optic lines. Earlier, Shyam Telelink was demerged from Shyam Telecom group, which is a listed company. Some years ago, the Shyam group had sold its GSM-based operations in Rajasthan to called 'Oasis' to Bharti Airtel.