NEW DELHI: Sistema Shyam Teleservices’ (SSTL) attempt to secure equity infusion from the Russian government could hit a roadblock, as the
existing rupee-rouble debt agreement between India and Russia does not permit such deals, a government official told ET.
The Russian government was looking to buy a 20% stake in SSTL for over Rs 3,000 crore through the funds available under the rupee-rouble debt agreement. Currently, the rupee-rouble trade reserve parked with the Reserve Bank of India (RBI) has a balance of about $2 billion.
The agreement, which was renegotiated in 2007, allows the debt funds to be used by the Russian government or Russian companies for investments in India. The funds available to the Russian government, however, cannot be used for buying shares and capital market transactions. “...(the funds) shall be used for productive purposes and not for making profits out of transactions on the capital market,” states the reworked agreement.
Sistema has sought “technical clarifications” on the matter from the two governments. Company officials refused to comment on the issue. The Foreign Investment Promotion Board (FIPB) had cleared the proposal in November. SSTL, formerly known as Shyam Telelink, is a joint venture between Shyam Telelink and Sistema JSFC.
Sistema holds 73.7% stake in the joint venture while the Shyam group holds 23.79%. The company is an aggressive player in the telecom market and has launched its services under the MTS brand.
According to the proposal, the unlisted SSTL would issue 662.75 million shares, representing a 19.8% stake, on a preferred basis to the Russian Federal Property Agency at Rs 49.31 a share. Simultaneously, the company would issue up to 228.55 million shares to its Indian promoters at par, or Rs 10 per share. The deal would reduce Sistema’s holding in SSTL to about 54%. The share issue to the Indian promoters would help SSTL keep foreign stake below the 74% cap.
The company, which received a pan-India licence in March 2008, currently has over 3 million customers. SSTL is looking to raise $2 billion to ramp up its infrastructure, and is in talks with the China Export & Credit Insurance Corporation (Sinosure) and Japanese banks.
Between 1953 and the collapse of the Soviet Union in 1991, bilateral trade between the two countries was denominated in rupees and based on annual plans. The agreement was renegotiated in 1993 under which the existing rouble credit was denominated in rupees and a repayment schedule was drawn up involving repayment of about $1 billion of rupee equivalent of Russian currency over a 12-year period beginning 1994 and lower amounts for another 33 years.
Monday, December 28, 2009
Sunday, December 20, 2009
Previous famous cases in Indian corporate history where shareholder activism made a difference....
Anil Agarwal, Sterlite:
Abandoned a restructuring plan after institutional investors threatened legal action. Minority shareholders' stake in core Indian assets would have come down, in exchange for a piece in Vedanta's copper mine in Zambia, whose assets were unproven.
Niranjan Hiranandani, Hiranandani Constructions:
Has had to postpone the proposed merger of two group companies, Hirco Developments and Hiranandani Investment, with Hirco, its Londonlisted investment vehicle, after mounting pressure from shareholders.
Naveen Jindal, O.P. Jindal Group:
Abandoned plans to allot 15% stake in Nalwa Sons to 19 new employees through Esops after a few investors obtained a stay order from the Company Law Board, alleging that these staffers were in fact 'persons acting in concert' with the promoters.
J.P. Gaur, JP Associates:
The company called off its plan to transfer stake in JP Infratech, a 100% subsidiary that houses the multi-billion dollar Taj Expressway project, after the stock was hammered when the proposal was announced.
N.S. Sekhsaria, Gujarat Ambuja Cements:
The company used the loophole in the law to avoid making an open offer by maintaining its stake at just below 15%, despite taking over the company from the majority shareholders.
Rajiv Singh, DLF:
The company was forced to compensate shareholders whose debentures were forfeited when the firm was delisted in September 2003 even before it could come out with an IPO in 2007.
Abandoned a restructuring plan after institutional investors threatened legal action. Minority shareholders' stake in core Indian assets would have come down, in exchange for a piece in Vedanta's copper mine in Zambia, whose assets were unproven.
Niranjan Hiranandani, Hiranandani Constructions:
Has had to postpone the proposed merger of two group companies, Hirco Developments and Hiranandani Investment, with Hirco, its Londonlisted investment vehicle, after mounting pressure from shareholders.
Naveen Jindal, O.P. Jindal Group:
Abandoned plans to allot 15% stake in Nalwa Sons to 19 new employees through Esops after a few investors obtained a stay order from the Company Law Board, alleging that these staffers were in fact 'persons acting in concert' with the promoters.
J.P. Gaur, JP Associates:
The company called off its plan to transfer stake in JP Infratech, a 100% subsidiary that houses the multi-billion dollar Taj Expressway project, after the stock was hammered when the proposal was announced.
N.S. Sekhsaria, Gujarat Ambuja Cements:
The company used the loophole in the law to avoid making an open offer by maintaining its stake at just below 15%, despite taking over the company from the majority shareholders.
Rajiv Singh, DLF:
The company was forced to compensate shareholders whose debentures were forfeited when the firm was delisted in September 2003 even before it could come out with an IPO in 2007.
Saturday, December 19, 2009
'India's a high-risk, high-reward market' : MTS President
19 Dec 2009, 0013 hrs IST, Rashmi Pratap, | ||||||
Mikhail Shamolin is the man behind Russia’s largest telecom operator Mobile TeleSystems (MTS). The MTS president is also on the board of Sistema
as a ‘high-risk, high-reward’ market and foresees consolidation in the telecom sector. In an interview with ET , he talks about acquisitions, branding, bullishness on CDMA technology and more. Excerpts: How do you think running a business in India is different from running it in Russia? I think, India is fairly competitive, more competitive than Russia. I think, India is a very entrepreneurial, vibrant, dynamic market with lots of energy, lots of potential, all at the same time. It is a ‘high-risk, high-reward’ type of market. What is Sistema doing to promote brand MTS in India? Besides the general logo, look and the feel that MTS India has taken from the bigger MTS, the particular brand strategy is adapted to the Indian market. On the one hand, it supports the affordable brand and, on the other hand, it is a high quality look and feel brand. The strategy we are pursuing with CDMA data services is more upper-end than the poor man’s phone. It is an affordable brand with good execution. Indian operators are increasingly looking at Africas and the Middle-East to expand operations. What about MTS? Not at the moment. We don’t really find many markets with low levels of penetration, low levels of competition and big population. The reason India is interesting because it is the only market in the world with the potential of 800 million people not having a mobile phone and still growing. If you want to be in Africa, to be able to have a market comparable to India, you have to be pretty much in all the African countries, which is not achievable in the short-to medium-term. So India is the best out of the growing markets. Why are you so bullish on the CDMA technology? Tatas and Reliance Communications have now opted for GSM as well. There are a couple of reasons. One, both CDMA and GSM are coming together in the LTE (long-term evolution, successor to 3G) standard. So, in a couple of years, there won’t be much difference. Secondly, spectrum in CDMA’s 800 MHz band is better for cost and coverage than spectrum (in the 1,800 MHz band) that some of the new players are using. Thirdly, CDMA is good for data. The biggest differentiator remain the handsets. Soon handsets will become very generic and software will be more important. So there won’t be much difference. Given an option, will you go for the GSM platform in India, like the Tatas have done? No, I don’t think so. And that’s because of the reasons given earlier. Isn’t profitability a big issue for late entrants like Sistema? Well, profitability is a big issue for the market itself. There is high risk, but the potential is high reward. Indian market fits the Sistema profile. It is a venture capital type of investment . The upside is 800 million potential customers. Do you expect consolidation in the sector? I think consolidation is necessary. I don’t think the market can be healthy with the number of competitors that currently exist because it’s not a social support system; it’s business. I think the government should push the legislation forward to allow M&As as soon as possible. That will be better for the industry. If it is allowed, will you look at any acquisitions? I think it’s still early. We are thinking about it, but we will have to see how everything plays out. There are no firm plans for now. | ||||||
Thursday, December 17, 2009
Technical Clarity on recieving Russian govt funds only next year : CEO
Mumbai: Sistema Shyam Teleservices (SSTL) expects to receive the $676 million, parked with the Reserve Bank of India, once there is ‘technical clarity’ on the purchase of the 20% stake in the company by the Russian government. SSTL is a joint venture between Russia’s Sistema and the Shyam Group. The Russian government will be utilising a part of the rupee-rouble trade reserve balance of $2 billion with the RBI to buy the shares in SSTL.
Speaking on the sidelines of the the launch of SSTL's mobile servcies in Mumbai, on Wednesday, Sergey Savchenko, chief financial officer, SSTL, told FE, “We have already received the FIPB (Foreign Investment Promotion Board) approval and the boards approval to issue additional shares. We are now expecting the technical clarity between the two governments (Russia and India) to happen by early next year. These funds would be used for capital and operational expenditure.” The firm said it requires an additional $ 500 million for its capex plans as it wants to invest $ 2 billion by the end of 2010. It has already invested $ 1.5 billion in acquiring specturm and developing the mobile telephony network.
Currently, Sistema, owned by the Russian government, is the majority stakeholder in SSTL with a stake of 73.71% while the Shyam Group holds 23.79% and the public 2.5%. Under Indian foreign direct investment norms, there is a cap on investments by foreign investors in a telecom venture of 74%.
SSTL also plans to raise $ 300-400 million to support its operational expenditure and is already in talks with a number of local banks in India for the same. Vsevolod Rozanov, president and ceo, SSTL, said, “We cannot raise funds from the international market to support our opex according to the RBI norms and therefore we are in talks with most of the local banks in India to raise about $ 300-400 million and these will be long term loans.”
Speaking on the sidelines of the the launch of SSTL's mobile servcies in Mumbai, on Wednesday, Sergey Savchenko, chief financial officer, SSTL, told FE, “We have already received the FIPB (Foreign Investment Promotion Board) approval and the boards approval to issue additional shares. We are now expecting the technical clarity between the two governments (Russia and India) to happen by early next year. These funds would be used for capital and operational expenditure.” The firm said it requires an additional $ 500 million for its capex plans as it wants to invest $ 2 billion by the end of 2010. It has already invested $ 1.5 billion in acquiring specturm and developing the mobile telephony network.
Currently, Sistema, owned by the Russian government, is the majority stakeholder in SSTL with a stake of 73.71% while the Shyam Group holds 23.79% and the public 2.5%. Under Indian foreign direct investment norms, there is a cap on investments by foreign investors in a telecom venture of 74%.
SSTL also plans to raise $ 300-400 million to support its operational expenditure and is already in talks with a number of local banks in India for the same. Vsevolod Rozanov, president and ceo, SSTL, said, “We cannot raise funds from the international market to support our opex according to the RBI norms and therefore we are in talks with most of the local banks in India to raise about $ 300-400 million and these will be long term loans.”
Wednesday, December 16, 2009
10 paise per min or 1 paise per second !!!
Loop Mobile crashes per second billing with '10 paisa per minute' rate in Mumbai news
16 December 2009
Mumbai: Carrying the mobile tariff rate war further, Loop Mobile has tansformed the seemingly difficult to beat 'one paisa per second calling' with a new plan that allows its prepaid customers to call all Loop Mobile numbers at just 10 paise per minute.
Considering the average call hold time for prepaid subscribers, the new plan, caled 'Mumbai ka Gang' plan, offers better value with '10 paise per minute', the company says
Loop Mobile said in a press statement, "It is superior to the 1ps / sec plans that are currently available in the market. Alternatively, for those who are comfortable with the 'per second calling', there is another plan that allows subscribers to make calls at '1 paisa per 6 seconds'. So depending on the usage and convenience, the consumer can decide and chose the plan that best suits their budget!"
While the plan for '10 paise per minute' can be recharged with etop denominations of Rs29, Rs49 or Rs236, the one for '1 Paisa per second' can be recharged with Rs28, Rs47 or Rs235 denominations.
16 December 2009
Mumbai: Carrying the mobile tariff rate war further, Loop Mobile has tansformed the seemingly difficult to beat 'one paisa per second calling' with a new plan that allows its prepaid customers to call all Loop Mobile numbers at just 10 paise per minute.
Considering the average call hold time for prepaid subscribers, the new plan, caled 'Mumbai ka Gang' plan, offers better value with '10 paise per minute', the company says
Loop Mobile said in a press statement, "It is superior to the 1ps / sec plans that are currently available in the market. Alternatively, for those who are comfortable with the 'per second calling', there is another plan that allows subscribers to make calls at '1 paisa per 6 seconds'. So depending on the usage and convenience, the consumer can decide and chose the plan that best suits their budget!"
While the plan for '10 paise per minute' can be recharged with etop denominations of Rs29, Rs49 or Rs236, the one for '1 Paisa per second' can be recharged with Rs28, Rs47 or Rs235 denominations.
I have initiated this (the IPO) mentally :SSTL CEO as per ET
Sistema Shyam mulls IPO; rings operations in Mumbai
16 Dec 2009, 1855 hrs IST, PTI
MUMBAI: Sistema Shyam TeleServices (SSTL), which owns the new mobile brand
MTS, today said it will soon start working on raising funds through Indian bourses for
funding expansions.
"There is a requirement to look into this (raising fund through an IPO), but the current market situation does not allow us to be optimistic. Clearly this is one of the ways for raising money and we are very seriously looking into this option," SSTL President and CEO Vsevolod Rozanov said here.
Rozanov was speaking to media persons after launching the company's mobile service in the crowded and highly competitive Mumbai circle, where SSTL would offer local calls at half a paisa per second in Mumbai, Maharashtra and Goa.
The CEO said the IPO may not hit the market in the next six months, but the company would start working on the draft red herring prospectus (DRHP) in a few weeks from now.
"The next six months won't be the right time. I have initiated this (the IPO) mentally. We have not started the DRHP yet and will be doing it in the next few weeks. It's in the thinking process," Rozanov said.
Russian conglomerate Sistema holds 74 per cent stake in SSTL.
16 Dec 2009, 1855 hrs IST, PTI
MUMBAI: Sistema Shyam TeleServices (SSTL), which owns the new mobile brand
MTS, today said it will soon start working on raising funds through Indian bourses for
funding expansions.
"There is a requirement to look into this (raising fund through an IPO), but the current market situation does not allow us to be optimistic. Clearly this is one of the ways for raising money and we are very seriously looking into this option," SSTL President and CEO Vsevolod Rozanov said here.
Rozanov was speaking to media persons after launching the company's mobile service in the crowded and highly competitive Mumbai circle, where SSTL would offer local calls at half a paisa per second in Mumbai, Maharashtra and Goa.
The CEO said the IPO may not hit the market in the next six months, but the company would start working on the draft red herring prospectus (DRHP) in a few weeks from now.
"The next six months won't be the right time. I have initiated this (the IPO) mentally. We have not started the DRHP yet and will be doing it in the next few weeks. It's in the thinking process," Rozanov said.
Russian conglomerate Sistema holds 74 per cent stake in SSTL.
SSTL plans to raise another $400 million : Wall street Journal
MUMBAI -- Sistema Shyam TeleServices Ltd. plans to complete the rollout of its services across India by 2010, the company's chief executive said Wednesday.
Sistema Shyam TeleServices, branded MTS, plans to raise another $400 million, Vsevolod Rozanov said at the launch of the company's Mumbai operations.
The company has so far invested $40 million in its Mumbai service area operations and has operations in the Kolkata, West Bengal, Rajasthan, Tamil Nadu, Kerala, Bihar, Jharkhand, Delhi & NCR and Karnataka service areas.
Sistema Shyam TeleServices, branded MTS, plans to raise another $400 million, Vsevolod Rozanov said at the launch of the company's Mumbai operations.
The company has so far invested $40 million in its Mumbai service area operations and has operations in the Kolkata, West Bengal, Rajasthan, Tamil Nadu, Kerala, Bihar, Jharkhand, Delhi & NCR and Karnataka service areas.
MTS India Starts Mobile Service in Mumbai
MTS India the Mobile services brand of (Sistema Shyam TeleServices Limited (SSTL) today launches of its CDMA Mobile and EVDO Data (MBlaze) services in Mumbai telecom circle. MTS India is offering life time plan at Rs.49 with inbuilt One Paisa per second tariff. The operator also bring promotional offer at Rs.149 with One Paisa for 2 Second tariffs for all local and STD calls to any network valid for 180 days.The operator also bring 15GB free download offer on purchase of its MBlaze data connection as a part of inaugural offer.
The new tariff will be an improvement on the already available “per second billing” offer introduced under MTS brand in other circles, which has become an industry norm. With the launch in Mumbai, SSTL services under MTS brand are now available in 5 out of the 5 big metro cities of India. With the Mumbai launch, brand MTS will be presented in all the prominent metros of India with voice and High Speed data services. MTS India has shown it is fulfilling the roll-out commitment of more circles in a short span of time.
MTS India starts its CDMA-based mobile services along with its MBlaze EVDO mobile broadband access at 3.1mbps speed in Mumbai circle. MTS become the 9th mobile operator in Mumbai’s already crowded mobile service market. The other 8 mobile service operator in Mumbai are Vodafone, Airtel, MTNL (Dolphin/Trump/MTNL3G Jadoo), Loop Mobile (BPL), Idea, Aircel, TTML (Tata Indicom/Virgin Mobile and Tata Docomo) and Reliance Mobile (CDMA and GSM).
MTS India now present in all 5 important Indian metros including Mumbai. MTS brand is well recognized in India and worldwide for its commitment to high quality and innovative solutions. In a short span of time, MTS has secured over 2.3 million subscribers in the telecom circles of Kolkata, West Bengal, Rajasthan, Tamil Nadu, Kerala, Bihar, Jharkhand, Karnataka, and Delhi. MTS has more than 100 million subscribers all over the world.
Tuesday, December 15, 2009
Trai moves to curb telecom tariff wars
Rock bottom rates and tariff wars among mobile operators might soon be a thing of the past with sector regulator Trai deciding to intervene in the market and end years of forbearance. Operators would then have to present a business case each time they come out with a tariff package. Only once the regulator is convinced the new tariffs are profitable would they be approved.
With the Indian telecom market’s growing maturity, Trai had moved to a forbearance regime in 2004, wherein operators did not require prior approval for tariff packages, but were left to market forces. Operators simply had to file their tariffs with the regulator within a week of implementing them. Trai officials said that work on examining tariff packages has begun and that the regulator would soon invite companies to present their business case. The exercise would also cover existing tariff packages. “For the long-term health of the telecom sector and to ensure that it remains attractive to investors, we have decided to intervene in matters relating to tariffs,” confirmed a Trai official. “If we need to add another 500 million subscribers by 2012, the sector needs to be attractive for investors so that companies can raise money to fund network expansion. There should be a balance between the interests of stakeholders--consumers, industry and government--for the sector to remain healthy,” the official added. Bharti Airtel CEO Manoj Kohli had recently urged Trai to look into predatory pricing, where operators offer tariffs at below cost. How Trai tackles the issue remains to be seen since it would be easier for incumbent operators with economies of scale to prove a business case than newer operators. The shift in Trai’s stance on tariffs is significant because with eight new operators planning to start their services shortly, a fierce tariff war has already begun among operators. The race to the bottom has already started taking a toll on the industry: telecom stocks have lost their lustre; the market cap of leading companies has declined; and the revenue and profitability of even a top performing company like Bharti Airtel have slowed.
One example of just how cut-throat competition has become, new operator Unitech Wireless has offered local calls at 29 paise a minute on all networks. Since most calls from a new operator would terminate on other operators’ network, it would have to pay 20 paise a minute as termination charges, leaving it with only 9 paise.
“One has to examine the profitability aspect in each tariff package. If a company presents a case of breaking even within the fourth year of operations, it is understandable. But if it reaches that point after 14 years, then there’s no business case,” said an official
Monday, December 14, 2009
MTS BLAZE Mobile Broadband Review and comparison with Reliance Netconnect Plus and TATA Photon+
Wireless and Mobile broadband is gaining much popularity these days. In India there are three major players Reliance Netconnect Broadband plus, TATA Photon+ and BSNL for wireless Broadband services. There is a new Player MTS India who started its Mobile Broadband service sometime back. MTS India is a Shyam TeleServices Limited (SSTL) company. To give an introduction, MTS India is a CDMA operator with coverage in 8 states across India. MTS India has launched Mobile broadband services MBLAZE with Wireless USB modem based on EV-DO (Evolution-Data Optimized or Evolution-Data only).
We have reviewed there services and compared them with Reliance Netconnect Plus Broadband, TATA Photon Plus and BSNL EVDO.
First let`s see what MTSindia is offering
MBLAZE Premium (Price Rs3150)
Device and Installation
We will say nothing new; MBLAZE premium is same as Reliance Huawei EC168C in terms of design. Device is compact with a good finish and easily fits in to your pocket. Device is having MicroSD card reader in it, so that you can use it as a Data Storage pen drive. Device is compatible for both HSD and CDMA 1X for seamless connectivity.
Installation Procedure is Plus and Play, if you are using the device first time; it may take upto 5 minutes to install all the drivers(Automatically).
Performance
In terms of Download speed MTS BLAZE is ahead of Reliance Netconnect+ and TATA Photon+, probably because of congestion free network(Less no of users). We got an Average download speed of 650 Kbps in MTS BLAZE coverage area. We are unable to check speed in CDMA 1X coverage.
Coverage (Big Negative Factor)
The main issue with MTS BLAZE is coverage. And probably the factor on which you can not compromise. MTS is having high speed BLAZE coverage in 15 cities as of now including Delhi, Jaipur, Jodhpur, Trivandrum, Calicut, Kochi, Chennai, Coimbatore, Trichy, Bangalore, Kolkatta, Siliguri, Patna, Mangalore and Durgapur. You will also get CDMA 1X coverage in Bihar- Jharkhand, Delhi, Karnataka, Kerala, Kolkata, Rajasthan, Tamil Nadu and West Bengal. Other Direct competitors TATA Photon Plus, Reliance Netconnect Broadband plus and BSNL are having coverage across INDIA either in High Speed Network or in CDMA 1X Network. But as per MTS India website, they are including new cities soon. As per current plan Mumbai, Pune, Goa, Mysore, Belgaum, Bhiwadi and Gangtok will get MTS services soon.
Account Management
Simplest is the only word we can say. MTS BLAZE is Prepaid service, So no worry about bills. Reliance Netconnect+ and TATA Photon+ have also started Prepaid services.
Cost of Data Plan
MTS BLAZE is slightly cheaper than other competitors Like Reliance and TATA. Higher the Data Limit Value, Cheaper will be the price. Just have a look on comparison with Reliance Netconnect+
1 GB Plan
MTS BLAZE --- Rs 598
Reliance Netconnect+ --- Rs 650
3 GB Plan
MTS BLAZE --- Rs 798
Reliance Netconnect+ --- Rs 850
5 GB Plan
MTS BLAZE --- Rs 898
Reliance Netconnect+ --- Rs 1099
10 GB Plan
MTS BLAZE --- Rs 1200
Reliance Netconnect+ --- Rs 1250
15 GB Plan
MTS BLAZE --- Rs 1500
Reliance Netconnect+ --- Rs 1750
Additional Usage
MTS BLAZE --- 50Paisa/MB
Reliance Netconnect+ --- 50Paisa/MB Postpaid, 1Rs/MB in Prepaid
Apart from these plans MTS is having Higher Data Usage plans upto 50GB. If you don’t recharge for any of these packs then you need to pay 2Rs/MB on DATA basis.
Unique Free Websites surfing Offer
As an introductory MTS is offering free Internet surfing on selected websites. These websites are --
Email will be free for Indian yahoo email addresses e.g. myname@yahoo.in, and myname@yahoo.com email addresses. Email attachment downloads will be free from the given free websites.
Final Words
Now question is which Mobile wireless Broadband is best in INDIA, Reliance Netconnect+, TATA Photon+, BSNL EVDO or MTS BLAZE?
Clearly MTS BLAZE is cheaper than other services, but on the other hand you need to compromise in poor network Coverage. But I think as time passes MTS will improve their network coverage and then it will give strong competition to other Players. As of now if you stay in any of the BLAZE coverage area and usually don’t go for roaming trips then MTS BLAZE can be a good cost effective mobile broadband service for you.
We have reviewed there services and compared them with Reliance Netconnect Plus Broadband, TATA Photon Plus and BSNL EVDO.
First let`s see what MTSindia is offering
MBLAZE Premium (Price Rs3150)
- Plug and Play enabled
- Speed upto 3.1 Mbps
- Fastest uploads at a speed upto 1.8 Mbps
- Micro SD card slot for Data Storage
- Stylish Swivel Modem for Flexible Usage
- Plug and Play enabled
- Speed upto 3.1 Mbps
- Fastest uploads at a speed upto 1.8 Mbps
Device and Installation
We will say nothing new; MBLAZE premium is same as Reliance Huawei EC168C in terms of design. Device is compact with a good finish and easily fits in to your pocket. Device is having MicroSD card reader in it, so that you can use it as a Data Storage pen drive. Device is compatible for both HSD and CDMA 1X for seamless connectivity.
Installation Procedure is Plus and Play, if you are using the device first time; it may take upto 5 minutes to install all the drivers(Automatically).
Performance
In terms of Download speed MTS BLAZE is ahead of Reliance Netconnect+ and TATA Photon+, probably because of congestion free network(Less no of users). We got an Average download speed of 650 Kbps in MTS BLAZE coverage area. We are unable to check speed in CDMA 1X coverage.
Coverage (Big Negative Factor)
The main issue with MTS BLAZE is coverage. And probably the factor on which you can not compromise. MTS is having high speed BLAZE coverage in 15 cities as of now including Delhi, Jaipur, Jodhpur, Trivandrum, Calicut, Kochi, Chennai, Coimbatore, Trichy, Bangalore, Kolkatta, Siliguri, Patna, Mangalore and Durgapur. You will also get CDMA 1X coverage in Bihar- Jharkhand, Delhi, Karnataka, Kerala, Kolkata, Rajasthan, Tamil Nadu and West Bengal. Other Direct competitors TATA Photon Plus, Reliance Netconnect Broadband plus and BSNL are having coverage across INDIA either in High Speed Network or in CDMA 1X Network. But as per MTS India website, they are including new cities soon. As per current plan Mumbai, Pune, Goa, Mysore, Belgaum, Bhiwadi and Gangtok will get MTS services soon.
Account Management
Simplest is the only word we can say. MTS BLAZE is Prepaid service, So no worry about bills. Reliance Netconnect+ and TATA Photon+ have also started Prepaid services.
Cost of Data Plan
MTS BLAZE is slightly cheaper than other competitors Like Reliance and TATA. Higher the Data Limit Value, Cheaper will be the price. Just have a look on comparison with Reliance Netconnect+
1 GB Plan
MTS BLAZE --- Rs 598
Reliance Netconnect+ --- Rs 650
3 GB Plan
MTS BLAZE --- Rs 798
Reliance Netconnect+ --- Rs 850
5 GB Plan
MTS BLAZE --- Rs 898
Reliance Netconnect+ --- Rs 1099
10 GB Plan
MTS BLAZE --- Rs 1200
Reliance Netconnect+ --- Rs 1250
15 GB Plan
MTS BLAZE --- Rs 1500
Reliance Netconnect+ --- Rs 1750
Additional Usage
MTS BLAZE --- 50Paisa/MB
Reliance Netconnect+ --- 50Paisa/MB Postpaid, 1Rs/MB in Prepaid
Apart from these plans MTS is having Higher Data Usage plans upto 50GB. If you don’t recharge for any of these packs then you need to pay 2Rs/MB on DATA basis.
Unique Free Websites surfing Offer
As an introductory MTS is offering free Internet surfing on selected websites. These websites are --
- www.yahoo.co.in and www.yahoo.in
- www.Wikipedia.org
- www.makemytrip.com
- www.cricinfo.com*
- http://shopping.indiatimes.com*
- www.MTSindia.in
Email will be free for Indian yahoo email addresses e.g. myname@yahoo.in, and myname@yahoo.com email addresses. Email attachment downloads will be free from the given free websites.
Final Words
Now question is which Mobile wireless Broadband is best in INDIA, Reliance Netconnect+, TATA Photon+, BSNL EVDO or MTS BLAZE?
Clearly MTS BLAZE is cheaper than other services, but on the other hand you need to compromise in poor network Coverage. But I think as time passes MTS will improve their network coverage and then it will give strong competition to other Players. As of now if you stay in any of the BLAZE coverage area and usually don’t go for roaming trips then MTS BLAZE can be a good cost effective mobile broadband service for you.
new players will need to recover 70 paise per minute in order to break even : HSBC securities
MUMBAI: CDMA operator Sistema Shyam Teleservices (SSTL), the Indian arm of Russian telecom giant Sistema JSFC, will launch services in Mumbai
this week, becoming the 12th player in the country’s largest revenue-generating telecom circle. The company is pumping in Rs 450 crore for its Mumbai foray, betting big on the high churn rate in the financial capital.
The entry of SSTL is expected to intensify competition in a market where operators are scrambling for subscribers even as their revenues are nosediving. As in other circles, SSTL is expected to offer per second billing in Mumbai, too.
SSTL will also roll out Mblaze, its pre-paid high speed data service with free-of-charge use of some websites including Yahoo and Wikipedia, sources told ET. The SSTL spokesperson declined to comment. The capex for new operators like SSTL is substantially lower than incumbents as they are riding high on infrastructure sharing and outsourcing of non-core services like IT and customer assistance. SSTL has outsourced IT operations to IBM and is sharing telecom infrastructure with Tata-Quippo and public sector BSNL.
The company offers services under the MTS brand and has over 3 million users across eight circles. While Mumbai will be the ninth circle to see the launch, Maharashtra & Goa will be the next to follow. SSTL suffered a loss of Rs 590 crore in FY09.
Sistema is the majority share holder in SSTL, formerly known as Shyam Telelink, with a 73.7% equity stake, while the Shyam group holds a 23.79% stake. The remaining 2.5% is held by Indian minorities.
The company will have to wage a tough battle to gain market share in Mumbai, where mobile density is already over 100%, said telecom analysts.
According to HSBC Securities and Capital Markets analyst Rajiv Sharma, outlook for new players is increasingly difficult. “Given sub-optimal operations in the 1800 MHz band and low volumes, new players will need to recover 70 paise per minute in order to break even, whereas incumbents can attain this at 37 paise per minute. Most exposed in our view are players with a regional focus and CDMA pure-plays,” he said.
However, the overcrowding in the world’s fastest growing telecom market is not a deterrent for new players. SSTL president & CEO Vsevolod Rozanov recently told ET that the company is focused on revenue generation, which is boosted by free minutes and low call rates. "We clearly see that at this stage, we are aiming at breaking even. We believe that these kinds of offers will support our ambitious targets," he had said. SSTL is targeting to rope in 30 million subscribers in the next three years to break even.
The entry of SSTL is expected to intensify competition in a market where operators are scrambling for subscribers even as their revenues are nosediving. As in other circles, SSTL is expected to offer per second billing in Mumbai, too.
SSTL will also roll out Mblaze, its pre-paid high speed data service with free-of-charge use of some websites including Yahoo and Wikipedia, sources told ET. The SSTL spokesperson declined to comment. The capex for new operators like SSTL is substantially lower than incumbents as they are riding high on infrastructure sharing and outsourcing of non-core services like IT and customer assistance. SSTL has outsourced IT operations to IBM and is sharing telecom infrastructure with Tata-Quippo and public sector BSNL.
The company offers services under the MTS brand and has over 3 million users across eight circles. While Mumbai will be the ninth circle to see the launch, Maharashtra & Goa will be the next to follow. SSTL suffered a loss of Rs 590 crore in FY09.
Sistema is the majority share holder in SSTL, formerly known as Shyam Telelink, with a 73.7% equity stake, while the Shyam group holds a 23.79% stake. The remaining 2.5% is held by Indian minorities.
The company will have to wage a tough battle to gain market share in Mumbai, where mobile density is already over 100%, said telecom analysts.
According to HSBC Securities and Capital Markets analyst Rajiv Sharma, outlook for new players is increasingly difficult. “Given sub-optimal operations in the 1800 MHz band and low volumes, new players will need to recover 70 paise per minute in order to break even, whereas incumbents can attain this at 37 paise per minute. Most exposed in our view are players with a regional focus and CDMA pure-plays,” he said.
However, the overcrowding in the world’s fastest growing telecom market is not a deterrent for new players. SSTL president & CEO Vsevolod Rozanov recently told ET that the company is focused on revenue generation, which is boosted by free minutes and low call rates. "We clearly see that at this stage, we are aiming at breaking even. We believe that these kinds of offers will support our ambitious targets," he had said. SSTL is targeting to rope in 30 million subscribers in the next three years to break even.
Saturday, December 12, 2009
The Indian telecom sector could be going the airline way: ET
| MUMBAI: The Indian telecom sector could be going the airline way. Once the rising star of India Inc, the local telecom industry is now grappling The sector could likely see a shakeout, which may help it regain its lost glory, said analysts and company officials. “Overcapacity is a characteristic of bubbles,” said Idea Cellular managing director Sanjeev Aga. “At the national level, overcapacity implies wasteful deployment of national resources (like spectrum) and just offers falling tariffs temporarily.” Since June, the country’s telecom players have been indulging in a price war that had seen tariffs being slashed by a large quantum. After Tata DoCoMo introduced the one-paise-per-second rate, other competitors have had to follow suit, prompting most companies to witness a fall in profitability. Analysts too derated telecom stocks post the country’s biggest tariff war that brought down call rates. And, that’s not the end. Along with new capacity, competition is expected to rise as new players with deep pockets make a line for what was till last year, one of the India’s fastest growing sectors. In 2007, the government allotted licenses to new players, including Unitech, Datacom, Loop Telecom and Swan Telecom (now Etisalat ). The growth is evident as mobile phones are becoming common. In a country of 1.15 billion, the mobile subscriber base totals about 500 million people. New as well as existing operators are expanding infrastructure to service more people at lower tariffs. The same trend was witnessed in the aviation sector, which has now nose-dived from its peak in 2007. According to industry estimates, telecom operators are ready with lines to accommodate another 200 million people in the next one year. Mr Aga said markets tend to be merciless in working out the sector overcapacity. “The greater the overcapacity, the greater the short-term pain. But, this is the market’s way of separating the efficient from the inefficient, and restoring balance. The efficient usually emerge stronger from the test and are unchallengeable,” he added. The sector’s woes began when the government handed out new licenses to players in 2007, despite not having enough spectrum. Rekha Jain, executive chairman of the Telecom Centre of Excellence and professor at IIM Ahmedabad, said: “When the government knew that an operator requires a minimum amount of spectrum (4.4 Mhz for GSM) to start services, how could it allow everybody to come in? And now, everybody is setting up networks. The government wanted competition, but it has created overcapacity, which will lead to consolidation.” Banks have added fuel to the fire through indiscriminate lending. “Bank and vendor financing is encouraging overcapacity in the sector, despite the fact that new players’ plans look unsustainable in the long-term,” HSBC Securities and Capital Markets analyst Rajiv Sharma said in a recent report. “Some of the leading operators are now restructuring their loans,” said industry sources. “If that continues to be the case, there may be some bankruptcies in the sector within two years from now,” said a top official at a telco on condition of anonymity. A top official at a public sector bank said telecom has received easy lending because it is an important part of infrastructure. “The current state is an aberration and will correct itself,” he opined. HSBC’s Mr Sharma, however, said: “The current scenario, with 10-11 players, is unsustainable and a reflection of poor government policies. We are of the view that market with 5-6 players is ideal in the Indian context.” He pointed out that even if the entire spectrum were to be made available in India, it would still be insufficient to cater to all the players. “It may be more logical to promote investments in telecom infrastructure, encourage rural penetration and rural broadband rather than focus on market structure,” he added. |
Friday, December 11, 2009
not very well disguised — government subsidy for Sistema’s investment in India- says http://www.globaltelecomsbusiness.com
Sistema Shyam to sell 20% to Russia
11 December 2009
A Russian government investment agency is to take a 19.8% stake in Sistema’s Indian operation, though Sistema will buy it back in 2014 Read more: [Sistema] [Sistema Shyam] [MTS] [India] [Russia] [Russian Federal Agency]
Comment: This sounds a bit like a disguised — not very well disguised — government subsidy for Sistema’s investment in India. But, given that France Telecom, Deutsche Telekom, Singtel, Global Crossing and a number of other international operators have state shares in one form or other, that is not unusual.
Indian mobile operator Sistema Shyam TeleServices will sell about 20% stake to the Russian government for $677 million. The Indian telecom major is planning to dispose off 662 million shares, which represents a 19.8% stake, on a preferred basis to the Russian Federal Agency at $1.06 per share.
The proceeds will be used to fund the expansion of its operations in the Indian market.
The Indian mobile unit of Russian oil-to-telecoms group, Sistema, is also planning to offload up to 228.55 million shares to its Indian founders at par. The Russian government intends to sign a deal under which Sistema will guarantee to acquire the Russian government’s shares in Sistema Shyam by 2014.
Parent company Sistema controls the MTS mobile phone business in Russia and Sistema Shyam also markets its services under the MTS brand in India.
Sistema holds 73.71% of Sistema Shyam at present, while India’s Shyam Group owns 23.79%. The remaining shares are held by some minority shareholders. The transaction is expected to end before December 31 2009. GTB
SSTL targets positive EBIDTA by 2013, leadership in data market
Key elements of updated SSTL strategy as outlined by Leonid MELAMED President, Sistema JSFC on Dec 9th at the presentation of Q3 performance of Sistema
http://www.sistema.ru/doc/doc.asp?obj=79211
Data focus by launching high speed data network in top~60 cities, achievement of leadership position on data market.
Selective approach to voice by focusing on priority circles and ARPU improvement.
Effective cost management,optimization of investments in the project. Active use of managed services and outsourcing.
Further development of MTS-Indiabrand.
Targets for the updated SSTL strategy: positive EBITDA by 2013, revenues of $1.5 bln by 2014 and cumulative CAPEX through 2018 of approximately $2.3 bln
http://www.sistema.ru/doc/doc.asp?obj=79211
Data focus by launching high speed data network in top~60 cities, achievement of leadership position on data market.
Selective approach to voice by focusing on priority circles and ARPU improvement.
Effective cost management,optimization of investments in the project. Active use of managed services and outsourcing.
Further development of MTS-Indiabrand.
Targets for the updated SSTL strategy: positive EBITDA by 2013, revenues of $1.5 bln by 2014 and cumulative CAPEX through 2018 of approximately $2.3 bln
Fitch rates India's Sistema Shyam's Term Loan 'A-(ind)(SO)'
Dec 10 - Fitch Ratings has today assigned India's Sistema Shyam Teleservices Limited's (SSTL) INR7.5bn term loan from Punjab National Bank (PNBK.BO: Quote, Profile, Research) a National Long-term rating of 'A-(ind)(SO)'.
The rating is based solely on the corporate guarantee from SSTL's parent, Sistema JSFC (SSAq.L: Quote, Profile, Research) (Sistema: 'BB-'/Stable), which owns a 73.7% stake. SSTL has the license and the required spectrum to roll out services in 22 telecom circles in India, and is in the process of rolling out its pan-India telecom services network; it has commenced roll-out in eight circles. During FY09 (year ending March 2009), Sistema infused INR20bn by way of equity and INR11.67bn as a loan in SSTL.
Fitch notes that SSTL has a weak stand-alone credit profile. During FY09, the company posted operating revenues of INR952m, operating EBITDA of negative INR2.2bn and a net loss of INR5.9bn. The management expects the company to be EBITDA positive from FY13 and net income positive from FY16. India's telecom market is highly competitive, and has recently been further affected by tariff wars led by the new entrants in the sector. The Indian telecom sector has low average revenue per user (ARPU) of under INR300 (USD6), combined with a high number of competing telecom operators within a telecom circle.
An upgrade in SSTL's guaranteed debt programme would be based on the upgrade of Sistema's rating. Likewise, a downgrade of Sistema's rating or the revocation of the corporate guarantee for the rated programme constitute negative ratings drivers.
Sistema is the majority share holder in SSTL with a 73.7% equity stake, while the Shyam Group holds a 23.79% stake and the remaining 2.5% is held by Indian minorities. Formerly known as Shyam Telelink Limited, SSTL was re-named in FY09. Incorporated in 1995, the company obtained a Basic Telephony Service License in 1998 for the Rajasthan Circle and started its commercial operations in June 2000 under the 'Rainbow' brand name. Further in 2003, the Company migrated to the Unified access service Licenses. Presently SSTL offers mobile telephony services on code division multiple access (CDMA) platform in eight circles namely - Rajasthan, Tamil Nadu, Kerala, West Bengal, Bihar, Kolkata, Delhi and Karnataka.
Sistema is a diversified, Russia-based industrial investment holding company with subsidiaries operating in various industries, including telecoms, technology, banking, real estate, tourism and the media. Telecommunications dominate Sistema's profile.
The rating is based solely on the corporate guarantee from SSTL's parent, Sistema JSFC (SSAq.L: Quote, Profile, Research) (Sistema: 'BB-'/Stable), which owns a 73.7% stake. SSTL has the license and the required spectrum to roll out services in 22 telecom circles in India, and is in the process of rolling out its pan-India telecom services network; it has commenced roll-out in eight circles. During FY09 (year ending March 2009), Sistema infused INR20bn by way of equity and INR11.67bn as a loan in SSTL.
Fitch notes that SSTL has a weak stand-alone credit profile. During FY09, the company posted operating revenues of INR952m, operating EBITDA of negative INR2.2bn and a net loss of INR5.9bn. The management expects the company to be EBITDA positive from FY13 and net income positive from FY16. India's telecom market is highly competitive, and has recently been further affected by tariff wars led by the new entrants in the sector. The Indian telecom sector has low average revenue per user (ARPU) of under INR300 (USD6), combined with a high number of competing telecom operators within a telecom circle.
An upgrade in SSTL's guaranteed debt programme would be based on the upgrade of Sistema's rating. Likewise, a downgrade of Sistema's rating or the revocation of the corporate guarantee for the rated programme constitute negative ratings drivers.
Sistema is the majority share holder in SSTL with a 73.7% equity stake, while the Shyam Group holds a 23.79% stake and the remaining 2.5% is held by Indian minorities. Formerly known as Shyam Telelink Limited, SSTL was re-named in FY09. Incorporated in 1995, the company obtained a Basic Telephony Service License in 1998 for the Rajasthan Circle and started its commercial operations in June 2000 under the 'Rainbow' brand name. Further in 2003, the Company migrated to the Unified access service Licenses. Presently SSTL offers mobile telephony services on code division multiple access (CDMA) platform in eight circles namely - Rajasthan, Tamil Nadu, Kerala, West Bengal, Bihar, Kolkata, Delhi and Karnataka.
Sistema is a diversified, Russia-based industrial investment holding company with subsidiaries operating in various industries, including telecoms, technology, banking, real estate, tourism and the media. Telecommunications dominate Sistema's profile.
AMSOST visits EGM - Updates
A few AMSOST members attended the EGM at Jaipur representing the association. The members protested against Resolution no 1 on allotment of shares at par to Indian Promoters. Thier dissent was discussed and noted. The members also welcomed and voted for the Resolution no 2 for allotment of shares to the Russian agency at 49.31.
On the sidelines of the meet, the members had lengthy discussions with all senior managment team of both Russian and Indian partners.
The Russian team emphasized that they are keen to meet and listen to the shareholdes concerns and grievances. They have invited AMSOST members to come meet them in Janaury to discuss the IPO plans.
On the concerns of further equity enhancements, it was vehemently denied by all the senior Russian management and it was verbally assured to us that minority wont be diluted any further before the IPO. We will however discuss this further when we meet them in January.
Overall, yesterdays meeting was very cordial and we were pleasantly surprised by the accomodative and communicative attitude that the Russian management displayed.
On the sidelines of the meet, the members had lengthy discussions with all senior managment team of both Russian and Indian partners.
The Russian team emphasized that they are keen to meet and listen to the shareholdes concerns and grievances. They have invited AMSOST members to come meet them in Janaury to discuss the IPO plans.
On the concerns of further equity enhancements, it was vehemently denied by all the senior Russian management and it was verbally assured to us that minority wont be diluted any further before the IPO. We will however discuss this further when we meet them in January.
Overall, yesterdays meeting was very cordial and we were pleasantly surprised by the accomodative and communicative attitude that the Russian management displayed.
Sistema Shyam To Sell 20% Stake To Russian Govt - dow wire
By Dhanya Ann Thoppil and R. Jai Krishna
Unlisted Sistema Shyam will issue 662.75 million shares, representing a 19.8% stake, on a preferred basis to the Russian Federal Property Agency at 49.31 rupees (2 US cents) each, the company said in a statement. It will also issue up to 228.55 million shares to its Indian founders at par, or INR10 a share.
Sistema currently owns 73.71% of Sistema Shyam, while India's Shyam Group holds 23.79%. The remainder is held by minority shareholders.
A person close to Sistema described the Russian government's acquisition of Sistema Shyam shares as a "financing arrangement," saying Sistema will pledge to buy back the government's SSTL shares in five years' time.
She said the price Sistema pays in five years will include interest, or could be the market price for the stock.
The deal will reduce the holding of Sistema in the Indian company to about 54%. The allotment of shares to the Indian founders will, however, help Sistema Shyam keep the total foreign stake in it below the government-mandated limit of 74% for telecom firms.
Sistema Shyam currently provides mobile services on the code division multiple access, or CDMA, platform in eight of India's 22 telecom service areas and had 2.30 million users at the end of October.
It is one of the new entrants to India's crowded mobile-services market, the second-largest and the fastest-growing by number of subscribers. While new service providers try to launch their operators without delay across India to gather market share--increasing their fund requirements--a price war among companies is making their margins low.
Sistema Shyam Chief Executive Vsevolod Rozanov had said earlier the Russian investment would come from that country's reserve balance of $2 billion currently parked with India's central bank. Russia has to invest that amount in Indian projects under earlier agreements between the two countries.
"The new share-holding pattern will improve the financial stability of SSTL [Sistema Shyam] and will increase its share value," Rozanov said Thursday.
The funds from the share sale will be used to develop the company's business in the telecom service areas where it currently operates and to set up networks in regions it doesn't currently cover, he said.
The deal is expected to close before Dec. 31, a spokesman for Sistema Shyam told Dow Jones Newswires.
-By Dhanya Ann Thoppil and R. Jai Krishna, Dow Jones Newswires; +91.11.4356.3333; krishna.jai@dowjones.com
(Will Bland in Moscow contributed to this story.)
Of DOW JONES NEWSWIRESBANGALORE (Dow Jones)--India's Sistema Shyam TeleServices Ltd., a unit of Russia's Sistema JSFC (SSA.LN), said Thursday it has agreed to sell a nearly 20% stake to the Russian government for $676.9 million, giving the company much-needed funds to expand operations in India's mobile-telephony market.
Unlisted Sistema Shyam will issue 662.75 million shares, representing a 19.8% stake, on a preferred basis to the Russian Federal Property Agency at 49.31 rupees (2 US cents) each, the company said in a statement. It will also issue up to 228.55 million shares to its Indian founders at par, or INR10 a share.
Sistema currently owns 73.71% of Sistema Shyam, while India's Shyam Group holds 23.79%. The remainder is held by minority shareholders.
A person close to Sistema described the Russian government's acquisition of Sistema Shyam shares as a "financing arrangement," saying Sistema will pledge to buy back the government's SSTL shares in five years' time.
She said the price Sistema pays in five years will include interest, or could be the market price for the stock.
The deal will reduce the holding of Sistema in the Indian company to about 54%. The allotment of shares to the Indian founders will, however, help Sistema Shyam keep the total foreign stake in it below the government-mandated limit of 74% for telecom firms.
Sistema Shyam currently provides mobile services on the code division multiple access, or CDMA, platform in eight of India's 22 telecom service areas and had 2.30 million users at the end of October.
It is one of the new entrants to India's crowded mobile-services market, the second-largest and the fastest-growing by number of subscribers. While new service providers try to launch their operators without delay across India to gather market share--increasing their fund requirements--a price war among companies is making their margins low.
Sistema Shyam Chief Executive Vsevolod Rozanov had said earlier the Russian investment would come from that country's reserve balance of $2 billion currently parked with India's central bank. Russia has to invest that amount in Indian projects under earlier agreements between the two countries.
"The new share-holding pattern will improve the financial stability of SSTL [Sistema Shyam] and will increase its share value," Rozanov said Thursday.
The funds from the share sale will be used to develop the company's business in the telecom service areas where it currently operates and to set up networks in regions it doesn't currently cover, he said.
The deal is expected to close before Dec. 31, a spokesman for Sistema Shyam told Dow Jones Newswires.
-By Dhanya Ann Thoppil and R. Jai Krishna, Dow Jones Newswires; +91.11.4356.3333; krishna.jai@dowjones.com
(Will Bland in Moscow contributed to this story.)
Wednesday, December 9, 2009
SSTL rejects all AMSOST proposals
In an effort to close the widening gap beween the shareholders and the promoter management, AMSOST wrote to the CEO for a conducive arrangment so that the shareholder value not be eroded and high court orders be followed in spirit. But alas, the company chose not to respond favorably and is talking in legal terms only.
The string of communication is as follows :
1. AMSOST letter to SSTL CEO
2. Response from Legal Head SSTL
3. AMSOST proposals to SSTL
4. Response from Legal Head SSTL
__________________________________________________________
Dear Respected Vsevolod,
We welcome the proposal of inclusion of the Agency of Russian Federation in the company as investor at the specified valuation. We are however shocked at the proposal of giving the Indian Promoters greater of 22 crore shares at Rs 10 each. In our view this is completely unjustified and signals oppression of the minority shareholder. We, as a group feel that this move is against the spirit of the respectable High Court order. The spirit of the court order clearly directs the company to fulfill the two conditions of listing and providing a exit route at all times before going ahead with any more restructuring.
We think this proposal undermines the otherwise globally shareholder friendly image of the Sistema group in terms of not carrying its minority shareholders interests along with its own. We had been diluted heavily in 2008 and now again on the eve of the High Court IPO guideline, the company has chosen to disassociate totally from its shareholders by putting them at the receiving end.
A respectable proposal surely would have been if the minority shareholders were offered shares in the same proportion as the Indian promoters at Rs 10 in all fairness. Alternatively, if the companies stock is valued by an international agency at INR 49.31, an allotment of such a large quantum of shares at such a steep discount tantamounts to daylight robbery of other shareholders interests.
As investors, we have kept full faith in Sistema to steer this company in the right direction. We wish the company and its team well and expect that the company should also reciprocate by not taking any actions which are so detrimental to the shareholders interests.
We would like the company to reconsider this unacceptable proposal. Kindly allow us meeting time in the next day or two to present to you alternate proposals that will be a win win situation for all.
Awaiting an early response.
Thanking you,
Sincerely,
Sd/-
Alok Jain and many other shareholders
Association of Minority Shareholders Of Sistema Shyam Teleservices Ltd
Amsost.blogspot.com
B6/102 Safdarjung Enclave
New Delhi 110029
9811075877
CC: Respected Mr. Ron Sommer, Chariman
Respected Mr Sergey Cheremin, Dy Chairman
________________________________________________________________
Following are the two specific proposals that we would like to forward to you and the managment.
*************
Proposal # 1
Alok Jain
Convenor
AMSOST
4. Response from SSTL Legal head
The string of communication is as follows :
1. AMSOST letter to SSTL CEO
2. Response from Legal Head SSTL
3. AMSOST proposals to SSTL
4. Response from Legal Head SSTL
__________________________________________________________
1. AMSOST letter to SSTL CEO
Dear Respected Vsevolod,
We welcome the proposal of inclusion of the Agency of Russian Federation in the company as investor at the specified valuation. We are however shocked at the proposal of giving the Indian Promoters greater of 22 crore shares at Rs 10 each. In our view this is completely unjustified and signals oppression of the minority shareholder. We, as a group feel that this move is against the spirit of the respectable High Court order. The spirit of the court order clearly directs the company to fulfill the two conditions of listing and providing a exit route at all times before going ahead with any more restructuring.
We think this proposal undermines the otherwise globally shareholder friendly image of the Sistema group in terms of not carrying its minority shareholders interests along with its own. We had been diluted heavily in 2008 and now again on the eve of the High Court IPO guideline, the company has chosen to disassociate totally from its shareholders by putting them at the receiving end.
A respectable proposal surely would have been if the minority shareholders were offered shares in the same proportion as the Indian promoters at Rs 10 in all fairness. Alternatively, if the companies stock is valued by an international agency at INR 49.31, an allotment of such a large quantum of shares at such a steep discount tantamounts to daylight robbery of other shareholders interests.
As investors, we have kept full faith in Sistema to steer this company in the right direction. We wish the company and its team well and expect that the company should also reciprocate by not taking any actions which are so detrimental to the shareholders interests.
We would like the company to reconsider this unacceptable proposal. Kindly allow us meeting time in the next day or two to present to you alternate proposals that will be a win win situation for all.
Awaiting an early response.
Thanking you,
Sincerely,
Sd/-
Alok Jain and many other shareholders
Association of Minority Shareholders Of Sistema Shyam Teleservices Ltd
Amsost.blogspot.com
B6/102 Safdarjung Enclave
New Delhi 110029
9811075877
CC: Respected Mr. Ron Sommer, Chariman
Respected Mr Sergey Cheremin, Dy Chairman
________________________________________________________________
2. Response from Legal Head SSTL
Mr. Alok Jain B-6/102, Safdarjung Enclave,
New Delhi – 110029
Dear Mr. Alok Jain,
This has reference to your letter dated 25 Nov. 2009 addressed to Mr. Vsevolod Rozanov, CEO and President, Sistema Shyam TeleServices Limited regarding Company’s proposal of preferential allotment of shares.
Mr. Rozanov has instructed me to address the doubts and reservations expressed by you in your aforesaid letter qua Company’s proposal of preferential allotment of shares.
We have perused your aforesaid letter and observe that you intend to offer few alternate proposals which you claim will provide a win-win situation for all. We request you to immediately e-mail us the same at my email so that we appreciate and evaluate its viability under the applicable laws.
While on the subject, we request you to also please indicate your role, responsibility & authority to represent the Association of Minority Shareholders of Sistema Shyam TeleServices Limited and the list of shareholders and the number of shares held by them.
This reply letter is sent to you at your address mentioned in your letter under reference, though courier, as also through e-mail at amsost@gmail.com
Thanking You,
Best Regards,
Arkady Kochetkov
Head of Corporate Legal_____________________________________________________________
3. Our Proposals
Dear Mr Kochetkov,Following are the two specific proposals that we would like to forward to you and the managment.
*************
Proposal # 1
TO OFFER FOR SALE THE SHARES OF THE MINORITY SHAREHOLDERS AT 49.31 AS A BLENDED OFFER TO THE NEW INVESTOR. SO ESSENTIALLY, THE COMPANY WOULD ISSUE FRESH 18% (approx) NEW SHARES AND OFFER 2% (approx) OF OLD SHARES ( held by minority shareholders).
Benefits
By this option, the company would act in the spirit of the High Court ruling which clearly mentions about giving priority to shareholders for an exit route. Till date 15 months have elapsed and no exit option as per high court order has been provided by the company. Hence the benefits of complying with the court is there.
By this option, the company would act in the spirit of the High Court ruling which clearly mentions about giving priority to shareholders for an exit route. Till date 15 months have elapsed and no exit option as per high court order has been provided by the company. Hence the benefits of complying with the court is there.
Secondly, the entire court order is hinged upon listing of the shares due to the illiquidty in hands of the minority shareholders and the poor price discovery. We believe that all shareholders would tender their shares in such a offer for sale and the NEED FOR IMMIDIATE LISTING and the costs and post listing issues may be avoided for now by the company.
Thus with this option, the shareholders get a fair exit, the company complies with the High court order and the pressure to go for listing eases out at this tough time in the telecom sector. The new investor is not affected by this change.
*********
Proposal #2
TO OFFER SHARES IN THE SAME PROPORTION TO THE MINORITY SHAREHOLDERS AS THE ALLOTMENT TO THE INDIAN PROMOTERS AS RIGHTS AT PAR.
Though not a preferred option, this proposal will atleast prevent low cost dilution of the minority shareholders by allotting shares to the indian promoters at 10 rs.
The net loss to the company by such allottment to Indian promoters at 10 rs is aproximately 800-900crores ( almost 200 million USD) which translates to approximately 3 rs per share loss to the minority shareholder. This action would tantamount to unfair corporate governance practice that most shareholders would like to challenge. By using Proposal 2, we can eliminate this notional loss and make the shareholders feel at par.
**********
We believe in fairness and that is all we are asking. We wish very well for the company but not at the cost of getting oppressed. We were told by Mr Rozanov and Mr Sergey that the HIGHEST corporate governance standards will be maintained. We are only asking for the same words to be put in actions.
Regarding the association, it is a small group of some shareholders so far. However, we intend to enroll thousands of shareholders in the next few months in case we don't find the companies' actions to be fair towards the shareholders. We intend to knock on all possible regulatory and legal doors to ensure that our shareholders value is not eroded. However, we surely hope we will not be pushed into that situation.
I request an urgent meeting for discussion of the same. We surely wish an early amicable solution as we wish well to the company.
Convenor
AMSOST
4. Response from SSTL Legal head
Dear Mr. Alok Jain,
We refer to your specific proposals. We have perused the same and our reply to it, without prejudice to one another, is as under:-
Firstly, the issue pertains to the domain of shareholder’s rights, subject to the jurisdictional competence of the Company’s Board of Directors, and not the Company’s rights.
Secondly, your proposals have no correlation with Company’s Board of Directors proposal of preferential allotment of shares / Notice of Extra Ordinary General Meeting dated 31 Oct. 2009 which being an independent and distinct matter, cannot be linked and dealt with in the manner proposed by you.
Thirdly, your proposals purport to suggest alternatives to preferential allotment of shares by the company. As you are aware that the right to take a final decision in the matter of preferential allotment rests with shareholders of the company and as a shareholder you are entitled to participate in deliberations of the general body and present your views to the shareholders.
That apart, without prejudice, we offer the following comments:
Proposal I
The first proposal envisages that the company offers your shares to the incoming investor as a blended offer. While you are welcome to make any offer to anyone, the company, cannot under the Companies Act, 1956 make any such alleged blended offer by including thereunder an offering of your shares and the holding of other shareholders. The proposed action is totally alien to law.
Proposal II
The proposal before the general body is not for allotment on rights basis but for preferential allotment and it would be for the general body to take a final decision after considering all relevant issues and the views that may be expressed by the different shareholders as to what would be in the best interest of the company and the shareholders.
We still await the list of shareholders that your association purports to represent.
With these views, your aforesaid proposal is consigned to records.
Thanking You,
Best regards,
Arkady Kochetkov
Head of Corporate Legal
*****************
We refer to your specific proposals. We have perused the same and our reply to it, without prejudice to one another, is as under:-
Firstly, the issue pertains to the domain of shareholder’s rights, subject to the jurisdictional competence of the Company’s Board of Directors, and not the Company’s rights.
Secondly, your proposals have no correlation with Company’s Board of Directors proposal of preferential allotment of shares / Notice of Extra Ordinary General Meeting dated 31 Oct. 2009 which being an independent and distinct matter, cannot be linked and dealt with in the manner proposed by you.
Thirdly, your proposals purport to suggest alternatives to preferential allotment of shares by the company. As you are aware that the right to take a final decision in the matter of preferential allotment rests with shareholders of the company and as a shareholder you are entitled to participate in deliberations of the general body and present your views to the shareholders.
That apart, without prejudice, we offer the following comments:
Proposal I
The first proposal envisages that the company offers your shares to the incoming investor as a blended offer. While you are welcome to make any offer to anyone, the company, cannot under the Companies Act, 1956 make any such alleged blended offer by including thereunder an offering of your shares and the holding of other shareholders. The proposed action is totally alien to law.
Proposal II
The proposal before the general body is not for allotment on rights basis but for preferential allotment and it would be for the general body to take a final decision after considering all relevant issues and the views that may be expressed by the different shareholders as to what would be in the best interest of the company and the shareholders.
We still await the list of shareholders that your association purports to represent.
With these views, your aforesaid proposal is consigned to records.
Thanking You,
Best regards,
Arkady Kochetkov
Head of Corporate Legal
*****************
Russian Agency stake to be bought back by company after 5 years - undisclosed terms of the agreement : Vedimosti
http://www.vedomosti.ru/newspaper/article.shtml?2009/12/08/220816
A rough translation follows :
State credit for “System” At Indian “daughter” АФК “System” is
Sistema Shyam Teleservices Ltd. (SSTL) difficulties with attraction
of financial resources. Sale of 19,8% of the shares Rosimusjestvu
will solve problem, but instead of АФК it is necessary in five
years to repurchase State share, adding to price of sale of 5-9% of
annual
The day after tomorrow stockholders SSTL will make decision about
increase of the company capital (meeting summons see on
www.vedomosti.ru). Now the operator acts just in eight from 22
areas, and for creation of panIndian network which SSTL promised to
launch by October 2010, “significant means" are necessary , is said
in summons. Earlier the топ-managers of the АФК “System” evaluated
them in $4-7 billion. Banks do not want to credit SSTL, referring
to insufficiency of her own capital, is said in the document: debt
SSTL is 22,58 bn rupees (about $490 million), and losses
accumulated on (the end of fiscal year) March 31 2009 are 12,12 bn
rupees (about $260 million), so, that pure assets SSTL decrease.
The company needs urgent injection of the capital, is noted in
summons, and in reasonable term it can be made only the way of
private placement of shares.
Stockholders have to approve placement of additional shares SSTL:
equity company capital will be increased by 36,3%, following which
19,8% of increased capital will be sold Rosimusjestvu to 49,31
rupee for share ($1,07), and 6,8% - three Indian stockholders SSTL:
Intell Invofin India (will repurchase 3,4%), A. T. Invofin India
and Cellphone Credit Securities India (on 1,7%). And Indians will
be able to repurchase new shares face value - 10 rupees for paper
($0,22), i.e. almost впятеро cheaper, than Russian state.
Independent auditor Vishnoy Manoj Associates evaluated a fair cost
of the share SSTL even below - only to 6,38 rupees on October 27
($0,14), is said in the document. Evaluation based on the last
аудированной records SSTL and, as a matter of fact, balance cost of
shares reflecting, explains it the chief of the АФК press-service
Julia Belous. She does not reflect a fair market cost of the share
, assures Belous.
The day after tomorrow stockholders SSTL will make decision about
increase of the company capital (meeting summons see on
www.vedomosti.ru). Now the operator acts just in eight from 22
areas, and for creation of panIndian network which SSTL promised to
launch by October 2010, “significant means" are necessary , is said
in summons. Earlier the топ-managers of the АФК “System” evaluated
them in $4-7 billion. Banks do not want to credit SSTL, referring
to insufficiency of her own capital, is said in the document: debt
SSTL is 22,58 bn rupees (about $490 million), and losses
accumulated on (the end of fiscal year) March 31 2009 are 12,12 bn
rupees (about $260 million), so, that Correspondent of “Sheets” was
acquainted with technique used by the auditor, and made sure that
she is based on balance companies ratings and does not use
prognosis sizes.
It is planned that the state, purchasing shares SSTL, will complete
simultaneously with “System” agreement, on the conditions of which
АФК in five years after transaction it is obliged to repurchase a
share of the state in SSTL either at the market price (in dollars),
or at the price of transaction, paying commission for use of means
not below bank, source, close to the participants of prepared
agreement says. Return ransom at the price of not below price of
purchase is confirmed plus determined per cent - mandatory
condition of transaction, by the employee of one of Russian
departments. It is a question of commission within the range of 5-
9% of annual in dollars, the топ-manager of large
telecommunications company heard. It confirms other source, close
to one of the parties of prepared agreement. That is why price of
purchase of shares SSTL for state will be higher, than for Indian
stockholders: Росимущество as opposed to миноритариев can transform
investment on credit, explains this interlocutor of “Sheets”.
Белоус did not start to make comments on the details of possible
agreement with state, as well representative Rosimusjestva acted.
A rough translation follows :
State credit for “System” At Indian “daughter” АФК “System” is
Sistema Shyam Teleservices Ltd. (SSTL) difficulties with attraction
of financial resources. Sale of 19,8% of the shares Rosimusjestvu
will solve problem, but instead of АФК it is necessary in five
years to repurchase State share, adding to price of sale of 5-9% of
annual
The day after tomorrow stockholders SSTL will make decision about
increase of the company capital (meeting summons see on
www.vedomosti.ru). Now the operator acts just in eight from 22
areas, and for creation of panIndian network which SSTL promised to
launch by October 2010, “significant means" are necessary , is said
in summons. Earlier the топ-managers of the АФК “System” evaluated
them in $4-7 billion. Banks do not want to credit SSTL, referring
to insufficiency of her own capital, is said in the document: debt
SSTL is 22,58 bn rupees (about $490 million), and losses
accumulated on (the end of fiscal year) March 31 2009 are 12,12 bn
rupees (about $260 million), so, that pure assets SSTL decrease.
The company needs urgent injection of the capital, is noted in
summons, and in reasonable term it can be made only the way of
private placement of shares.
Stockholders have to approve placement of additional shares SSTL:
equity company capital will be increased by 36,3%, following which
19,8% of increased capital will be sold Rosimusjestvu to 49,31
rupee for share ($1,07), and 6,8% - three Indian stockholders SSTL:
Intell Invofin India (will repurchase 3,4%), A. T. Invofin India
and Cellphone Credit Securities India (on 1,7%). And Indians will
be able to repurchase new shares face value - 10 rupees for paper
($0,22), i.e. almost впятеро cheaper, than Russian state.
Independent auditor Vishnoy Manoj Associates evaluated a fair cost
of the share SSTL even below - only to 6,38 rupees on October 27
($0,14), is said in the document. Evaluation based on the last
аудированной records SSTL and, as a matter of fact, balance cost of
shares reflecting, explains it the chief of the АФК press-service
Julia Belous. She does not reflect a fair market cost of the share
, assures Belous.
The day after tomorrow stockholders SSTL will make decision about
increase of the company capital (meeting summons see on
www.vedomosti.ru). Now the operator acts just in eight from 22
areas, and for creation of panIndian network which SSTL promised to
launch by October 2010, “significant means" are necessary , is said
in summons. Earlier the топ-managers of the АФК “System” evaluated
them in $4-7 billion. Banks do not want to credit SSTL, referring
to insufficiency of her own capital, is said in the document: debt
SSTL is 22,58 bn rupees (about $490 million), and losses
accumulated on (the end of fiscal year) March 31 2009 are 12,12 bn
rupees (about $260 million), so, that Correspondent of “Sheets” was
acquainted with technique used by the auditor, and made sure that
she is based on balance companies ratings and does not use
prognosis sizes.
It is planned that the state, purchasing shares SSTL, will complete
simultaneously with “System” agreement, on the conditions of which
АФК in five years after transaction it is obliged to repurchase a
share of the state in SSTL either at the market price (in dollars),
or at the price of transaction, paying commission for use of means
not below bank, source, close to the participants of prepared
agreement says. Return ransom at the price of not below price of
purchase is confirmed plus determined per cent - mandatory
condition of transaction, by the employee of one of Russian
departments. It is a question of commission within the range of 5-
9% of annual in dollars, the топ-manager of large
telecommunications company heard. It confirms other source, close
to one of the parties of prepared agreement. That is why price of
purchase of shares SSTL for state will be higher, than for Indian
stockholders: Росимущество as opposed to миноритариев can transform
investment on credit, explains this interlocutor of “Sheets”.
Белоус did not start to make comments on the details of possible
agreement with state, as well representative Rosimusjestva acted.
Thursday, December 3, 2009
PM to meet PM Vladimir Putin and Sistema's Vladimir Evtushenkov this week
India and Russia are expected to sign a number of key agreements during Prime Minister Manmohan Singh's December 6-8 visit here, including those on extension of the long-term defence cooperation programme beyond 2010 and construction of four more nuclear reactors at Kudankulam.
Singh, who is visiting Moscow at the invitation of President Dmitry Medvedev for the annual Indo-Russian summit, is expected to discuss a range of issues during his meetings here, including defence cooperation, global financial crisis, situation in Afghanistan and Pakistan and fight against terrorism, diplomatic sources said.
During Singh-Medvedev talks at the Kremlin on Monday, the two leaders would also focus on key bilateral issues, such as continuation of civilian nuclear cooperation beyond Kudankulam power plant and exploration of new vistas in the areas of space and knowledge-based economic projects.
The two countries are likely to sign several bilateral agreements after the Kremlin talks, such as pacts on the extension of long-term defence cooperation programme beyond 2010 and construction of four more nuclear reactors at the Kudankulam NPP, in addition to two 1,000 VVER light water reactors already being built by Russia, sources said.
Given the format of the Kremlin power structure, Singh is expected to hold talks with the Russian strongman, Prime Minister Vladimir Putin on the concrete economic issues, including on some possible joint projects in pharmaceuticals and conventional energy, the sources here said.
On December 7, the Prime Minister will also attend the closing ceremony of the 'Year of India in Russia' at a gala show being organised in the new hall of Bolshoi Theatre.
The meeting of the CEOs Council would be the main event on the sidelines of the Prime Minister's Moscow visit, indicating the two countries' resolve to promote business-to-business ties.
Ahead of Singh's visit, Russian Trade and Industry Chamber has set up an Indo-Russian Joint Business Council.
Singh, who is visiting Moscow at the invitation of President Dmitry Medvedev for the annual Indo-Russian summit, is expected to discuss a range of issues during his meetings here, including defence cooperation, global financial crisis, situation in Afghanistan and Pakistan and fight against terrorism, diplomatic sources said.
During Singh-Medvedev talks at the Kremlin on Monday, the two leaders would also focus on key bilateral issues, such as continuation of civilian nuclear cooperation beyond Kudankulam power plant and exploration of new vistas in the areas of space and knowledge-based economic projects.
The two countries are likely to sign several bilateral agreements after the Kremlin talks, such as pacts on the extension of long-term defence cooperation programme beyond 2010 and construction of four more nuclear reactors at the Kudankulam NPP, in addition to two 1,000 VVER light water reactors already being built by Russia, sources said.
Given the format of the Kremlin power structure, Singh is expected to hold talks with the Russian strongman, Prime Minister Vladimir Putin on the concrete economic issues, including on some possible joint projects in pharmaceuticals and conventional energy, the sources here said.
On December 7, the Prime Minister will also attend the closing ceremony of the 'Year of India in Russia' at a gala show being organised in the new hall of Bolshoi Theatre.
The meeting of the CEOs Council would be the main event on the sidelines of the Prime Minister's Moscow visit, indicating the two countries' resolve to promote business-to-business ties.
The Indo-Russian CEOs' Council is co-chaired by Reliance Industries Limited (RIL)'s Mukesh Ambani and Russian business conglomerate AFK Sistema's Vladimir Evtushenkov.
Ahead of Singh's visit, Russian Trade and Industry Chamber has set up an Indo-Russian Joint Business Council.
Wednesday, December 2, 2009
Russia gets FIPB okay to buy 19.8 pc in Sistema :ET
| NEW DELHI: The Foreign Investment Promotion Board (FIPB), the apex government body that approves all major investments into the country, has cleared the Russian government’s proposal to acquire a 19.8% stake in telecom company Sistema Shyam for about $676 million (Rs 3,051 crore). While the proposal had already been cleared by the telecom and commerce ministries, FIPB has now given its approval after the home ministry said it was not opposed to the deal. ET had first reported in March this year that the Russian government planned to pick up a 20% stake in Sistema Shyam for about $680 million. This values the company at about $3.5 billion. Russia’s Sistema currently holds a 73.7% stake in the telco while the rest is held by the Shyam Group. “Sistema Shyam previously arranged around $1 billion foreign funds and has been trying to arrange more funds through a foreign direct investment for the network establishment in various telecom circles. Accordingly, the foreign promoters of the company approached the Russian Federation for additional financial support to the company, that agreed in principal for an investment of up to $676 million in the equity of Sistema Shyam,” FIPB said when clearing the proposal, as per the minutes of the agency’s meet that held on November 20. The telco will now allot 662.7 million shares to the ‘Federal Agency for State Property Management of the Russian Federation’. Following the stake sale, Sistema’s stake in the company will come down to 54.08%. Sistema, which offers mobile services under the MTS brand in India, was among the nine new companies which were given licences early last year. The telco, which recently launched mobile services in Delhi, plans to be a pan-India player by the end of next year and currently has over three million subscribers here. Sistema Shyam’s top management had earlier told ET that it was looking at listing the company on the local bourses next year. The Russian government will be utilising the money under the Rupee-Rouble debt agreement between both the countries to finance its 19.8% stake in the telco. With India owing huge money to Russia (for products bought prior to the collapse of the Soviet Union), the two governments have agreed that Russia can utilise this rupee debt to finance its investments and joint venture projects in India. | |||
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