Imran Khan to endorse MTS in Rs 10-crore deal

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Imran Khan to endorse MTS in Rs 10-crore deal

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NEW DELHI: Telecom service provider MTS India has roped in Bollywood actor Imran Khan as its brand ambassador for two years. The 10-crore deal makes the Delhi Belly star the latest one to join a long list of celebrities, including Shah Rukh Khan, Abhishek Bachchan and MS Dhoni, endorsing telecom service companies. While it's the first time that Sistema Shyam TeleServices' brand has taken the celebrity plunge, Imran already endorses Coke and Levi's jeans.

However, MTS India spokesman and celebrity management firm Kwan Entertainment, which doesn't manage Khan but helped him in striking this deal, declined to comment.

"Imran will promote MTS through mass media, online and below-the-line promotional activities. He will also be part of Red Energy, a youth-centric online activity for the brand," an official directly involved with the developments said.

While the 2G scam has not deterred telecom firms from wooing celebrity endorsers, it has impacted their ad spends. Eight of the country's top 10 TV advertisers during January-September this year were consumer goods makers. Idea Cellular was the only telecom firm in the ranking, according to the media research firm TAM.

The telecom sector has been facing tough times with raging controversy on 2G spectrum allocation, rock-bottom tariffs, sliding average revenue per user, thinning margins and falling profits. High interest costs, banks shying away from lending and 3G roaming agreements being disputed by the government add to the sector's problems.

Approval and introduction of the new telecom policy that would have allowed liberal merger and acquisition norms and helped in consolidation of the sector, has been pushed back by nearly half a year. This may further add to telcos' woes. 

Sistema keen on telecom acquisitions, awaiting M&A norms

 Moscow, Dec 21: 

Stuck with a meagre 2.5 MHz of spectrum, Indo-Russian telecom operator MTS-India is awaiting the new government policy on mergers and acquisitions (M&A) to expand its operations in India.

“We are waiting for the new M&A policy because we do believe that the Indian market should be consolidated. We want to participate in this consolidation,” Sistema JSFC CEO, Mr Mikhail Shamolin, told a group of visiting journalists here.

MTS-India is a joint venture between Shyam Telecom and Sistema JSFC. Sistema holds the majority stake in the joint venture.

At the same time, Mr Shamolin said MTS India was keen on having an additional 2.5 MHz of spectrum, as it has fulfilled its contractual obligations and has the required number of subscribers, making the company eligible for additional bandwidth.

“We have an agreement with the government which says that we get 2.5 MHz spectrum and if we fulfil our obligations, we get another 2.5 MHz at the price we have paid initially,” he said.

However, he said 5 MHz (2.5 MHz+2.5 MHz) was not a good quantity of spectrum to provide quality telecom services and pointed out that the global standard was 20 MHz.

“Five MHz is too thin and too little,” he said, indicating that the group was waiting for the M&A policy to improve the situation.

“We are interested in consolidation. In which form exactly and in what kind of combination remains to be seen.

Definitely, we want to be one of the players. We do not want to exit the market given how much we have invested there and how important it is for the business of MTS and Sistema,” Mr Shamolin said.

MTS CEO sends greetings for all shareholders

Dear Alok and shareholders at AMSOST,

Thank you very much for the nice message and wishes. Let me reciprocate the same, I do hope the upcoming year will be joyful and prosperous for you and your families!

All the very best,

V.Rozanov

Sistema Shyam may get NLD licence soon

Sistema Shyam may get NLD licence soon

Press Trust of India / New Delhi December 15, 2011, 20:30 IST

The Telecom Ministry is likely to grant National Long Distance (NLD) licence to new telecom operator Sistema Shyam TeleServices (SSTL), which offers mobile services under MTS brand.
"...The proposal may be considered along with the draft of Rs 15,000 as processing fee," according to a Department of Telecommunications (DoT) note.
The company has fulfilled almost all the criteria required for being eligible to have NLD licence.
The company has submitted the certified copy of memorandum of article of association (MAA) and it has also submitted a copy of the paid up capital as of March 21, 2011 is Rs 31,93,92,00,000, so the networth criteria has been fulfilled.
The applicant company (SSTL) has stated that they have 26.05% Indian equity and 73.95% foreign equity. The foreign equity of the applicant conforms to 74% ceiling for which they have acquired FIPB approval.
The company has submitted business plan with funding arrangement as required under NLD guidelines.
With this the DoT has said that a letter of intent to SSTL for NLD licence may be issued.
Sistema Shyam TeleServices provides telecom services under the brand MTS with over 14 million wireless subscribers and operates in all 22 circles.
At the end of September 30, 2011 (Q3), the total capex investment by the company in India stood at Rs 6,243 crore, including Rs 161.7 crore made during the quarter. Consolidated debt from banks and financial institutions at the end of Q3 stood at Rs 6,860 crore.
Similarly at the end of Q3, SSTL's data card subscriber base stood at 1.07 million subscribers. The company's mobile subscriber base reached 13.27 million.
SSTL is a joint venture in which Russian conglomerate Sistema holds 56.68% stake, while the Russian government holds 17.14%. India's Shyam Group holds 23.98% and the remaining 2.2% is held by others.

India readies new rules on telecoms M&A : FT

India readies new rules on telecoms M&A

“The Indian telecom juggernaut is slowing fast, and the sector is trying to move beyond its infancy and adolescence towards maturity,” says Mohammad Chowdhury, head of telecoms at PwC in Mumbai. “A shakeout and some form of consolidation is going to be a big part of this process.”

The new, more liberal mergers and acquisitions framework is understood to have been agreed in draft at a meeting of India’s Telecom Commission on Friday, and is set to be confirmed at a further meeting this week. It will provide some relief to a sector that has struggled to get more profit out of its more than 900m users.
Things have become so bad that a delegation of long-time rival chief executives – including Vodafone’s Vittorio Collao, Bharti Airtel’s Sunil Mittal and Reliance Communications’ Anil Ambani – earlier this month trooped in to see Manmohan Singh, India’s Prime Minister, to complain about the country’s changeable and often-contradictory telecoms rules.
In a private letter handed over during the meeting, a copy of which has been seen by the Financial Times, the CEOs claim that the sector has “been brought to crisis point to the extent that the future of the industry is under threat”. The letter pleads for a “stable regulatory and fiscal regime” with no further “midterm surprises” – a barbed reference to the habit of Indian regulators of dreaming up new and unexpected rule changes.
The meeting is understood to have been brokered by Mr Ambani, whose debt-laden Reliance Communications has lost close to half its market value this year, against a backdrop of persistent speculation that he will enter some form of tie-up with his estranged brother and fellow billionaire, Mukesh Ambani.
In common with other groups, Reliance faces a telecoms market that is among the world’s most competitive and confusing. It boasts 12 operators – about twice as many as the norm for a developing market – competing in 22 “circles”, or geographic areas defined by regulation.
Meteoric growth in users over the past 5 years has come despite a dizzyingly complex regulatory set-up and has resulted in an overcrowded and bad-tempered market characterised by weak profits, flat revenues and falling investment. Analysts suggest that before things can improve the half dozen or so smaller operators must either exit or be bought out by larger groups.
On Friday the Telecom Commission, a body bringing together the disparate parts of India’s government, is understood to have agreed draft rules that future mergers could be allowed if the market share of any newly combined company does not exceed 60 per cent, up from the current limit of 40 per cent.
Vodafone, India’s third-largest mobile operator by subscribers, said: “We welcome greater flexibility in M&A rules, although it is not yet clear how the authorities would ensure that these were applied consistently.” Other industry figures, who spoke on condition of anonymity, cautioned that this higher upper limit was subject to further negotiation and could come with complex subsidiary regulations that would limit or delay consolidation.
In a test of the industry’s new-found unity, a range of other issues remain. The regime for spectrum is especially sensitive, given that allegations about its improper allocation lie at the heart of India’s $39bn telecoms corruption scandal – the aftermath of which is still rumbling on inside India’s Supreme Court.
The industry remains firmly united on one issue, however: its frustration with the government. One senior telecoms executive, who asked not to be named, said that even with clarity on merger laws, the authorities were unlikely to avoid the temptation of new charges and fees. “The government does not see that the telecoms industry is struggling. They see it as a golden goose, whose golden eggs can be harvested again and again, until the goose is dead.”

SSTL consolidated revenues up by 18%

India Blooms News Service

Mumbai, Dec 12 (IBNS) Sistema Shyam TeleServices Ltd. (SSTL), which operates its telecom services under the MTS brand in India, on Monday announces its unaudited consolidated US GAAP financial results for the third quarter ended September 30, 2011.

Key Financial & Operational Highlights for the Third Quarter of 2011:

Consolidated revenues up by 18% Q-o-Q to INR 3,282 million (USD 72 million). Quarterly revenues continue to grow faster than wireless (Voice & Data) subscriber base, which was up by 13% to 13.27 million.

Non-voice revenues from both data and mobile VAS for the quarter up by 32% Q-o-Q to INR 1,052 million (USD 23 million), which now contributes 32% of total revenue and the contribution has increased by 3.4 p.p for the quarter.

Blended mobile ARPU for the quarter increased to INR 85 vs. INR 82. The increase in ARPU is in contrast to a declining trend in the market.

SSTL’s data card subscriber base for the quarter up by 30% to 1.07 million subscribers. SSTL added 0.25 million data card subscribers during the quarter, highest additions in a quarter till date.

Consolidated OIBDA loss for the quarter stands at INR 4,584 million (USD 100 million). OIBDA margins improved 7 p.p. Q-o-Q.

SSTL launched, MTS MTAG 3.1 and MTS Livewire, India’s most affordable Android powered Smartphones in the Sub INR 5,000 category. With the launch of affordable Smartphones, SSTL takes the power and appeal of Android to the masses.

According to Vsevolod Rozanov, President and Chief Executive Officer of Sistema Shyam Teleservices Ltd, “SSTL has once again demonstrated robust growth across its key business metrics. The market response to our data centric: voice enabled strategy continues to be extremely positive. In fact, Government’s intent to increase broadband penetration in the country, as outlined in the Draft National Telecom Policy 2011 also supports our business strategy.

"However, we are awaiting further clarity on issues, such as additional spectrum availability. Inspite of all these challenges, we are committed to further drive growth in data usage amongst the masses, with smartphones and tablets playing a major role in this process.”

SSTL’s mobile subscriber base increased by 13% quarter-on-quarter and reached 13.27 million customers as of 30th September, 2011.

The growth in subscriber base of the company was largely driven by further strengthening of the distribution network, an increase in its retail universe across India and increased contribution from newly launched circles, said the company.

Mobile subscribers’ MoU for Q3 2011 declined to 291 min vs. 294 min in Q2 2011; the decline in MoU was mainly because of the decreasing share of free on-net minutes and also due to seasonal dip in the subscriber’s activity.

Industry net subscriber addition in Q3 2011 dipped further to 22 million compared to 39.9 million in Q2 2011. Total subscriber base reached 874 million and wireless tele-density was 73% at the end of Q3 2011. SSTL’s subscriber market share increased to 1.52% in Q3 2011 (vs. 1.38% in Q2 2011).

SSTL reported an OIBDA loss of INR 4,584 million for Q3 2011, reflecting an improvement in OIBDA margin by 132 p.p. Y-o-Y, margins improved as a result of 125% revenue growth over Q3 2010, the revenue growth was driven by 100% increase in subscriber base over Q3 2010.

By the end of Q3 2011, SSTL’s high speed mobile data services cover more than 200 cities in India, including all five metros. The number of data subscribers increased by 30% over Q2 2011 to 1.07 million.

SSTL’s bottom line during the quarter was impacted by increased forex charges. The Rupee has depreciated considerably against Dollar and other foreign currencies thus resulting in increased forex charges on long term Foreign Currency denominated loans.

Sergey Savchenko, Chief Financial Officer of Sistema Shyam Teleservices Ltd., commented, “One of the key highlights of our Q3-2011 results is that our Non Voice Revenue growth continues to be higher than the industry.

"Contribution of Non Voice Revenues to overall revenues increased to 32% during the current quarter, an increase of 3.4 p.p. over the last quarter. During the quarter our blended mobile ARPU increased in contrast to a declining trend in the market, this is again a strong reflection of our continued efforts to target quality customers.”

The CAPEX investments made by SSTL in India at the end of Q3 2011 stands at INR 62.43 billion; this includes the investment of INR 1,617 million made during Q3 2011. Consolidated debt from banks and financial institutions at the end of Q3 2011 stands at INR 68.6 billion.

Sistema Shyam TeleServices Ltd. (SSTL) is a venture, involving equity participation by Sistema {LSE: SSA} of Russia, the Russian Federation and the Shyam Group of India.

Sistema is the majority shareholder in the company which operates its telecom services under the MTS brand.

MTS adds nearly 800,000 customers with Android smartphones (India)

MTS adds nearly 800,000 customers with Android smartphones (India)

MTS, a unit of Sistema Syam TeleServices Limited (SSTL), has reportedly added around 800,000 customers in the month of October alone, with the launch of two low cost Android smartphones – MTS MTag 3.1 and MTS Livewire priced under US$ 100.

According to reports, a spokesperson for MTS has said that they were able to get 7,95,523 customers in the festive month of October because they gave the CDMA consumers the option to choose from a variety of Android phones at different price points and they also initiated a lot of awareness campaign across the country. He added that the launch of the two smartphones in the festive season helped propel their growth.

As per sources, pre-paid users received 150 minutes of calls, 150 SMSs and 150 MB of data free every month for 12 months, with the smartphone. Whereas postpaid users were offered a 12 month contract during which users had to pay Rs 250 each month, against which they received 250 minutes of calls, 250 SMSs and 250 MB of data free each month.

India's broadband plans hit by lack of spectrum, says MTS's Vsevolod Rozanov

India's broadband plans hit by lack of spectrum, says MTS's Vsevolod Rozanov

10 November 2011

Sistema Shyam's MTS India competes in the market by offering high-speed wireless broadband, but government broadband targets cannot be achieved unless it makes more spectrum available, says the CEO
Read more: India MTS Sistema Shyam wireless broadband Qualcomm

                               
Vsevolod Rozanov: India is the most competitive market in the
world. You have to reinvent yourself every moment to outperform
your competitors
                      
                      
The Indian government wants 160 million wireless broadband customers in the next few years — a relatively modest target in a country of 1.2 billion people. But the CEO of one of the most innovative mobile broadband providers in the country believes the government has not made enough spectrum available to achieve even that challenge.
“We have only 2.5 megahertz of spectrum and we are one of the data leaders,” says Vsevolod Rozanov, the CEO of MTS India, a Russian-backed operator in India’s highly competitive mobile market.
The government’s department of telecommunications is trying to persuade other parts of the government to release more spectrum for commercial use. “There is a significant business development opportunity,” says Rozanov, a Russian economist and management consultant who has led the Russian-Indian joint venture since it was set up in 2008.
“The government’s target is 160 million on broadband, but we have to get the spectrum, otherwise it’s impossible to realise the target.”
The official name of MTS India is Sistema Shyam Teleservices, but it uses the MTS brand that parent company Sistema also uses for the operator it controls in Russia.
Sistema’s holding in MTS India is just over 56%, and there is a small amount belonging to public shareholders, but there are two other main shareholders: Shyam Group, an Indian industrial company, with 24%, and the Russian government’s Federal Agency for State Property Management, which put in 17% in March 2011.
Sistema is the biggest shareholder in MTS in Russia, the NYSE-quoted company that is one of the three big Russian nationwide operators. It competes with VimpelCom, which uses the Beeline brand, and Megafon, as well as some smaller players.
India is a fiercely competitive market and it has become even more so in the past few years. As many as 14 operators are trying to win customers in India, of which nine have virtual nationwide coverage. “It’s probably the most competitive market in the world,” says Rozanov. “Some companies are less active but nine are very aggressive in the key markets.”
That compares with a usual total of three or four nationwide operators in most countries in the developed economies of Europe, North America and the richer areas of the Asia-Pacific region.
Even among the fast-growing poor nations — the four so-called BRIC countries of Brazil, Russia, India and China — conditions for Indian operators are tough. Average revenue per minute is $0.01 in India, says MTS India, half that of the more regulated Chinese market. By comparison, Russian operators can charge $0.05 a minute and Brazilian companies $0.13.
“This is a very, very tough market. The pricing is one of the lowest in the world and the number of operators per state is one of the highest.”
So what is the upside? Why does anyone bother? “Huge growth opportunities,” says Rozanov. “India has hundreds of millions of people.”
The number of subscribers has gone up 45% a year in the past three years, but there are still 700 or 800 million people without mobile connections. Those with mobile phones, however, may have two, three or four SIM cards — so customer loyalty is not high, something that Rozanov and his colleagues are also addressing in their strategies.
Tariffs dropped to their current levels after 2008, when the number of nationwide operators increased. MTS India was one such. At first it had a licence covering one region — or circle, in Indian terminology — and “we rolled out across the country from March 2009”.
“After the price wars, operators have stabilised prices, and now they are starting to increase them,” says Rozanov.
                  
                         
Cheaper handsets needed
                             
But he wants to see one price in particular lower than it is at the moment: the retail cost of an entry-level handset. “The cheapest handset is $15, and that’s still not affordable to many people,” he says. That limits growth in the basic voice and text market so MTS India is looking for alternative growth opportunities in data. “We have to find a niche to distinguish ourselves among the 14 players, and we have started a data-focused, voice-enabled strategy,” he says.”
MTS benefits, he says, from a decision taken in the early days of the Indian operation, to choose Qualcomm’s CDMA technology in preference to GSM for its operations, which use spectrum in the 800 megahertz band. The company uses the EV-DO revision A standard, allowing it to transmit data at speeds from 500 kilobits a second to 1.8 or 2 megabits “depending on the particular situation”, says Rozanov cautiously.
The company is upgrading to the so-called phase II of Qualcomm’s standard, which should push the speed to 4.5 megabits, “and that gives us very significant differentiation”, he says. Data “is something that allows us to be differentiated in a very crowded market. Our brand is considered one of the most data-friendly brands.”
The “focus on CDMA proved right”, he says. If MTS had wanted to use GSM it would have needed to use the 1,800 megahertz band, with poorer coverage in buildings and in rural areas. “Our spectrum means lower costs because we need fewer base stations. Most of our new customers are from semi-urban or rural areas and it would be suicidal for us to go for 1,800 megahertz spectrum.”
But wireless broadband in India is not a route to riches: it is still a tough market, says Rozanov. Of MTS’s 14 million customers in India, only 1.2 million are data customers. The price of smartphones is one of the barriers: “We sell a $100 Android device and we are the price leader in India,” he says. “We need a $50-$60 device to significantly increase the penetration of data.”
But there’s an education challenge too, he adds. Even when customers are buying smartphones, they are not making the most of them. He estimates that “even if we launched a super data device”, 90% of its usage would still be for voice.
And, he notes, even those on unlimited data plans do not make the most of them. “Customers don’t know what to do with the data. We require a huge education programme to use this data opportunity.”
It varies from region to region across the country, he notes. “Our analysis of every state in terms of potential voice and data revenue shows that some states are very voice-heavy.” Key places for data include the big cities of Delhi, Bangalore, Mumbai, Chennai and Kolkata, he notes.
There is “natural growth” in the broadband data market, but “it’s no hockey stick market”, he warns. But in urban markets where voice has reached 100% penetration, data is important in differentiating MTS from its many rivals.
                            
                       
Market consolidation
                              
Will there always be as many rivals? In the past few weeks, the Indian government has started to show signs that it recognises the need for consolidation. “The market is very crowded and customers are suffering because the networks are very limited,” says Rozanov.
If the rules are relaxed he hopes that “there will be certain consolidation in the market”, which will allow spectrum to be consolidated and used more effectively. “At the moment spectrum is distributed very narrowly among the operators,” he says. He compares the overall allocation to Austria’s, “a very different market”.
Before coming to India Rozanov was chief financial officer of the MTS group, having joined in 2006 when MTS merged with Comstar-UTS, another Russian operator, of which he was deputy CEO and CFO. He came into the industry after eight years with the management consultants Bain & Company, working in Moscow, London and Stockholm.
How does India compare with the Russian market? “It’s definitely much more competitive,” says Rozanov. “You have to be extremely innovative in driving costs down. But that’s something that creates excitement and challenge,” he adds.
MTS recently asked its staff in Russia and Ukraine if they would like to work in the Indian operation. “We had 200 applications for 15 positions,” says Rozanov. “The business really excites people. You have to reinvent yourself every moment to outperform your competitors. If you can make it in India, you can make it anywhere.”
One of the challenges, as he explained earlier, is the cost of handsets. “We’re working very closely with Qualcomm and the vendors to reduce this barrier,” he says. “Prices are going down. That is absolutely critical for [India’s] broadband plan.”
Price cuts are needed not just on smartphones, but on basic phones too, he says. “A 10-20% price reduction is something we can realistically expect. Operators have to work with vendors to drive the prices down.”
Despite the challenges, MTS India is adding from 800,000 to one million customers a month, he says — a number that means it is the second-fastest growing CDMA operator in the world, behind China Telecom’s two to three million a month increase.
The two big US CDMA operators, Verizon Wireless and Sprint, are both planning moves to LTE; meanwhile China Telecom is also likely to adopt something in the LTE family. How does MTS India see its long-term strategy?
“We’re not at this stage limited by the technology,” says Rozanov, “but we have questions to Qualcomm, given the spectrum situation in India.” The next step in the EV-DO family is revision B, “and if we get more spectrum, rev B will satisfy us for many years ahead”.
But he’s looking further ahead, to five or seven years, “and we do have time to address the roadmap for CDMA operators”, he says. First he needs to know how much spectrum the Indian authorities will license by 2016-17.
There are huge opportunities for operators in India in the coming years, but those operators have to consolidate to make the most of them — and they have to persuade the government to release spectrum if they are to work together to realise India’s broadband potential. GTB

Sistema wants MTS to go global

26 Oct 2011

Russia

According to Dow Jones, Moscow-based conglomerate AFK Sistema has announced that it wants to turn its Russian wireless unit Mobile TeleSystems (MTS) into a global telecoms player, with plans to move into a number of new markets. Sistema owner Vladimir Yevtushenkov commented: ‘We have made a decision to build MTS into a global player, and this means 200 million to 300 million subscribers and several dozen countries’. Although Yevtushenkov was not drawn on any potential acquisition targets, he did indicate that he views the conglomerate’s Indian telecoms operator Sistema Shyam TeleServices Ltd (SSTL, also known as MTS India) as an integral part of his plans; Yevtushenkov claimed that he expects the Indian cellco to sign up one million new subscribers every month.
As at end-June 2011 MTS was the largest wireless network operator by subscribers in Russia and the CIS, with operations covering all 83 Russian subjects (administrative subdivisions), both directly and via ownership of local concessionaires. In addition it has subsidiaries in Armenia, Belarus, Turkmenistan, Ukraine and Uzbekistan, which when counted alongside its domestic operations gives it a footprint covering more than 230 million people. In 2008, in a move outside of its familiar Eastern European territory, Sistema entered the Indian wireless market via SSTL (now MTS India). As at June 2011 MTS India reported 11.725 million subscribers, up from 5.138 million one year earlier. Despite strong annual gains MTS India has struggled to meet its previously-stated targets; it predicted 20 million subscribers by 2010, 35 million by 2012 and 56 million by 2014.

Russia, Mobile TeleSystems (MTS) (inc. Comstar), Sistema Shyam TeleServices (MTS India), Sistema, Corporate/Financial

MTS offers international roaming

17 Oct, 2011, 02.04PM IST, PTI

Sistema Shyam TeleServices Limited offers international roaming in 231 countries

NEW DELHI: Pre-paid customers of Sistema Shyam TeleServices Limited (SSTL), which offers mobile phone services under the MTS brand, can now roam across networks in 231 countries on their existing sim cards.

MTS today launched international roaming services for its pre-paid subscribers, enabling them to roam across 433 GSM networks in 231 countries, SSTL said in a statement.

MTS customers will be able to avail services in countries like the United States of America, Canada, Brazil, Chile, UK, France, Germany, China, Singapore, United Arab Emirates, Bahrain, Australia and New-Zealand, among others.

The company has also launched a dual mode SIM card which would work both on GSM handsets while abroad and on CDMA handsets while in India.

The company will use MACH telecom software to facilitate roaming by its pre-paid customers across 433 GSM networks in 231 countries.

The company claims that with this announcement, MTS becomes the first telecom operator in the country to provide international data roaming for CDMA pre-paid customers.

"With a view to enhance connectivity and convenience, we have now introduced international roaming services for our customers. This would enable our customers to stay connected while travelling abroad without changing their phone numbers and also enjoy seamless data connectivity on the go internationally," MTS India Chief Marketing and Sales Officer Leonid Musatov said.

MTS customers on international roaming would have access to GPRS services in 206 countries on 322 telecom networks.

Additionally, MTS customers will be able to enjoy high-speed downlink packet access (HSDPA) services in 114 countries on 145 roaming networks.

"We are delighted that MTS India selected our market-leading, inter-standard roaming solution to be the first in India to provide its pre-paid customers with seamless access to international roaming on GSM networks across the world," MACH India Regional Vice-President (Sales) Raghunatha Chary said.

SSTL is a joint venture between Sistema of Russia, the Russian government and the Shyam Group of India. Sistema is the majority shareholder in the joint venture company.

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MTS India launches data coverage on National Highway 4 ‎

MTS plans Rs 130 cr capex in state, TN

BS Reporter / Chennai Oct 13, 2011, 01:00

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Provides high speed mobile broadband in 40 towns across Tamil Nadu and 35 towns across Karnataka.
Sistema Shyam TeleServices, a joint venture between Russia’s Sistema and Indian firm Shyam Group, which is into telecom services under the brand MTS, plans to expand in Karnataka and Tamil Nadu for an investment of around Rs 130 crore during 2011.

The company on Wednesday announced launch of its second seamless high speed data (HSD) connectivity in India, on the highway connecting Chennai and Bangalore. It added it is planning to expand data coverage between other regions, including small towns.

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Cheenu Seshadri, chief strategy officer and COO, south and west regions, MTS India, said, The service would cater to data connectivity needs of industrial hubs between the two cities and the travellers on the go. We are planning to cover more areas, including highways and smaller towns with seamless HSD services in future. MTS India presently has around 13 million wireless subscribers.
It has also announced new tariff plans for customers tra-veling everyday between the two cities. Presently, MTS provides High Speed Mobile Broadband services in around 40 towns across Tamil Nadu and 35 towns across Karnataka.
The company has so far invested around $3 billion in India and would continue to invest to expand data connectivity services, he added.
It is planning to launch two to five phones in India every quarter in future, in the price range of Rs 3,000 to Rs 20,000 a handset, as part of expanding its data connectivity service. It has recently announced launch of two affordable android phones in India.
While the manufacturing of phones would be outsourced, the company plans to leverage the products as a strategy to increase the reach of its services to the customers.
The company earlier launched the HSD connectivity services in the 265 km long Delhi-Jaipur highway.

MTS india welcomes NTP 2011

More discussions needed before finalising telecom policy: Operators

Our Bureau

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‘Proposal to give infrastructure status will provide much-needed relief to the sector'

New Delhi, Oct. 10: 

Telecom operators have said that the draft telecom policy unveiled on Monday was good on intent but required more discussions before it is implemented.

“The draft NTP 2011 is expected to take the country into the next stage of inclusive growth. We understand that the Government will now initiate the consultative process across multiple stakeholders, including the telecom operators.

“Idea Cellular will actively participate in this consultation as the country formulates its new telecom policy. There are several areas that are included in the proposals and we will need to review each of them with our experts, before reverting to the policy maker, with our comments,” said Mr Rajat Mukarji, Chief Corporate Affairs Officer, Idea Cellular.

Shyam Sistema, which operates mobile services under the MTS brand, said the policy has to look at the interest of the CDMA operators. Mr Vsevolod Rozanov, President and CEO, MTS India, said, “We at MTS welcome the spirit of the new telecom policy. The strong focus to make affordable and reliable broadband available on demand by 2015 along with one nation, one licence regime is a welcome move. To make all this happen, we look forward to the formulation of supporting policies so that more spectrum can be released.”

“Equally significant would be the release of policy details specific to a range of issues, including delinking of spectrum and telecom licence, allowing of spectrum trading, pooling and sharing and also new M&A guidelines. One also needs to understand, how NTP 2011 seeks to look after the interest of the CDMA operators and their customers,” he added.

Bharti Airtel said that though the policy is in the right direction and signals the government's strong focus on future growth areas, final policy should provide level playing field and encourage more investments.

“The proposal to give infrastructure status to the telecom sector and rationalisation of taxes and levies will provide much-needed relief to the sector. This will help in further expansion of networks thus realising the Government's vision of providing connectivity and affordable telecom services to all. We look forward to constructive deliberations on the draft policy proposals and hope that the final policy will provide level playing field, encourage more investment in the sector - particularly in rural areas and for broadband and ensure the long-term sustainability and viability of the sector,” said a Bharti Airtel spokesperson.

The Association of Unified Service Providers of India (AUSPI), the industry body representing the CDMA operators, said that it supported move to abolish roaming charges, full mobile number portability.

“Emphasis on affordability of services is welcome step and AUSPI is confident that DoT will make available at affordable price optimum quantity of spectrum, rationalise levies to bring them down to those in other countries. AUSPI welcomes projects to create further capacities but urges that capacities already created in public and private sector be gainfully utilised first,” said Mr S.C. Khanna, Secretary General, AUSPI.

“Delinking of spectrum from licences — the cost of spectrum will go up which will, in turn, increase customer servicing costs. There appears to be no clarity on M&A guidelines which industry badly needs to rationalise and consolidate,” said Mr Hemant Joshi, Partner, Deloitte Haskins & Sells.

Keywords: draft telecom policy 2011,

Sistema Shyam won't hold IPO in 'foreseeable future'

By Olga Razumovskaya, Dow Jones Newswires Wednesday 14 September 2011

Official announcement from Indian mobile operator follows talk of possible IPO in 2012.

Sistema Shyam TeleServices Ltd., the Indian mobile phone unit of Russian conglomerate AFK Sistema, won't hold an initial public offering in India "in the foreseeable future," Sistema's president and chief executive said Wednesday. "There is no IPO planned in the foreseeable future," Mikhail Shamolin said at a press conference. The announcement comes despite comments from Sistema Shyam President Vsevolod Rozanov on Sept. 8 that the company could float in India in 2012. He said that if the Indian government's new telecommunications policy, expected to come into effect in October, is more favorable to the market than the current one, the company may set a date for an IPO as soon as six to nine months after the policy is issued.

Sistema Shyam: India IPO Possible In 2012 If Policy Favorable

MOSCOW -(Dow Jones)- Sistema Shyam TeleServices Ltd.'s (SSTL) President Vsevolod Rozanov said Thursday that the Indian government's new telecommunications policy expected in October would influence its decision on whether to hold an initial public offering in the country.

If the policy is more favorable to the Indian telecoms market than the current policy, the company may set a date for an IPO as soon as six to nine months after the policy is issued, Rozanov said.

Sistema Shyam, an Indian unit of Russia's OAO AFK Sistema (AFKS.RS), now has a market share of 1.38%, which is expected to grow by 0.5 percentage point annually, taking it to just under 4% within five years, he said.

The company's net profit in the second quarter of 2011 was practically unchanged at 6.575 billion Indian rupees ($142 million) compared with a year earlier. Its operating income before taxes, depreciation and amortization margin fell from -627% to -236% over the same period, in line with the company's plans, Rozanov said.

Sistema Shyam plans to be in the black in the last quarter of 2013.

AFK Sistema owns 56.68% of Sistema Shyam, India's Shyam Telecom owns 24%, the Russian government's Federal Agency for State Property Management of the Russian Federation, or Rosimushchestvo, owns 17.14%, and other shareholders own 2.18%.

India's largest phone providers include Bharti Airtel Ltd. (532454.BY), Bharat Sanchar Nigam Ltd. (BSNL), Vodafone Essar Ltd. and Reliance Communications Ltd. (532712.BY).

Copyright © 2011 Dow Jones Newswires

Sistema Q2 loss at Rs 657.6 cr ; Debt now at Rs 5736 crores !

New Delhi: Sistema Shyam TeleServices Ltd (SSTL), which operates telecom services under the MTS brand, today reported a net loss of Rs 657.6 crore for the second quarter ended June 30, 2011.

The company had posted a net loss of Rs 661.3 crore for the same quarter of the previous fiscal, SSTL said in a statement.

SSTL's revenues rose to Rs 278.2 crore in the April-June quarter of FY'12, up 164 per cent from Rs 105.5 crore in the same quarter last fiscal.

The company said overall revenues have continuously grown by over Rs 40 crore per quarter over the last four quarters.

"In spite of the continued challenges faced by the telecom industry in India, SSTL is on track to successfully execute its data-centric, voice-enabled strategy," SSTL President and Chief Executive Officer Vsevolod Rozanov said.

Non-voice revenues from both data and mobile value-added services for the quarter were up 36 per cent quarter-on-quarter at Rs 79.69 crore, contributing 29 per cent of the company's total revenue.

Blended mobile average revenue per user (ARPU) for the last three quarters remained consistent at Rs 82, the company said.

SSTL's data card subscriber base for the quarter rose by 40 per cent to 820,000 subscribers. SSTL added 236,000 data card subscribers during the quarter, the highest number of additions it has registered in a single quarter till date, the company said.

Mobile subscribers' minutes of usage (MoU) declined to 295 minutes in Q2, 2011, from 305 minutes in Q1, 2011. The decline in the MoU was mainly because of the reduced quantity of free on-net minutes offered by the company to its subscribers.

SSTL's mobile subscriber base stood at 11.7 million customers as of June 30, 2011. By the end of the second quarter of FY'12, SSTL had expanded its high-speed mobile data services to more than 200 cities in India, including all five metros. The number of data subscribers increased by 40 per cent vis-a-vis Q1, 2011, to 820,000.

"Our revenue growth continues to be faster than our growth in wireless subscribers. In the current quarter, our blended mobile ARPU remained consistent, as against a declining trend in the market. This is a strong reflection of our continued efforts to target quality customers," SSTL Chief Financial Officer Sergey Savchenko said.

The capital expenditure made by SSTL in India by the end of Q2, 2011, stood at Rs 6,080 crore, including an investment of Rs 252.7 crore during Q2, 2011.

The company's consolidated debt liability at the end of Q2, 2011, stood at Rs 5,736.7 crore.

Vodafone to market Sistema Shyam's CDMA-based data service

Vodafone to market Sistema Shyam's CDMA-based data services

Thomas K. Thomas

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New Delhi, Aug. 31: 

Vodafone has signed a franchisee agreement with Sistema Shyam to sell CDMA-based data services on a revenue-sharing basis.

According to the agreement, Vodafone will market CDMA dongles under a new brand, Netcruise. The service will ride on Sistema Shyam's spectrum and network infrastructure. While billing and collection is to be done by Sistema Shyam, Vodafone will get a share of the revenue generated from Netcruise subscribers.

The service, which was launched as a pilot in few areas a month ago, is now being extended across the country.

Sistema Shyam offers mobile services under the MTS brand and has a network suited for data services based on EVDO technology. When contacted, an official spokesperson of Vodafone confirmed the agreement. “The partnership leverages core strength of both business groups i.e. the EVDO network of MTS and the branding and distribution experience of Vodafone,” the spokesperson said.

However, Netcruise tariffs are higher than the data plans under MTS's own brand mBlaze. “Vodafone is merely distributing an MTS product, which is differentiated by the brand and distribution strengths that Vodafone provides. MTS have chosen to differentiate the tariffs on this basis,” Vodafone said.

Vodafone, which until now has been offering GSM-based services in India, added that the CDMA dongles would help it to address a wider customer base.

“The Netcruise product is positioned quite differently in the market from Vodafone's 3G products and provides more options at varied price points to the customer. This helps meet all customer segments and needs,” the spokesperson said.

Market analysts said that with spectrum being scarce, this type of deal will be on the rise in the telecom space. Earlier, Tata Teleservices and Virgin Mobile had inked a similar deal.

MTS Android 2.3 tablet - coming soon

MTS Android 2.3 tablet

By Sandeep Budki, The Mobile Indian, New Delhi, September 01, 2011

Mobile operator MTS will soon launch an Android 2.3 tablet. In the past five months it has released high end and sub-Rs 5,000 Android handsets bundled with its network services.

MTS, a mobile operator that is part of Sistema Shyam TeleServices Limited (SSTL), will launch an Android 2.3 based tablet for Indian consumers in the next three months.
Vsevolod Rozanov, president and chief executive officer of MTS India said to The Mobile Indian, "We will be launching an Android 2.3 based tablet by year end for the Indian market."
He didn't elaborate on the tablet's specifications or its manufacturer but said, "We will have tablets for both premium and price sensitive customers."
While there are many GSM tablets in the market there are not many that run on CDMA.
It may be recalled that around five months ago MTS started focusing on offering its subscribers high end smartphones bundled with its network. It started with HTC Pulse, a CDMA Android smartphone bundled with free calls, data and SMSes in India.
The smartphone, worth Rs 18,000, is available almost free for its existing as well as new customers, who just need to sign up for a monthly rental of Rs 1,500 with a commitment of 12 months to get the device.
Users get 1,500 minutes of talk time along with 1,500 free SMSes and free data usage of 1,500 MB every month for twelve months.
Apart from that MTS, a couple of days ago, unveiled two Android smartphones - MTS MTAG 3.1 manufactured by Huawei and MTS Livewire manufactured by ZTE, both in the sub-Rs 5,000 category.
Both phones incorporate Snapdragon S1 processors. Running on CDMA EV-DO Rev A technology, MTS MTAG 3.1 and MTS Livewire support high quality voice and net enabled data services. These phones will be available in the market from the third week of September.
During the unveiling of these devices, Rozanov said, "I am immensely pleased to announce the launch of MTS MTAG 3.1 and MTS Livewire smartphones, incorporating Qualcomm's Snapdragon S1 processors. This initiative has been designed to take the power of Android to the masses. Launched in the sub-Rs 5,000 category, these are the most affordable Android smartphones in India."
MTS is also gearing up to attract high end mobile and tablet users on its CDMA network, which is a better choice for data users.
Let's have a look at the possible CDMA devices in India that might come bundled with an MTS connection:

MTS launches cheapest Android smartphones

MTS launches cheapest Android smartphones

Karishma Saurabh Kalita, NDTV, August 30, 2011,

MTS has launched two Android Smartphones for just Rs.5000 for its subscribers in India. The MTS mTag 3.1 and MTS Livewire will feature Android 2.2 Froyo with Qualcomms S1 Snapdragon processors.

The MTS mTag 3.1 will feature a 2.8 inch capacitive touchscreen along with a 3.2 Megapixel camera. Both the smartphones  have direct access to Google, YouTube, Google Maps and Google Talk. Both the devices have an additional feature of Voice Search which will enable the user to find anything without having to type.

The MTS mTag 3.1 and MTS Livewire comes bundled with services like free talktime, free SMS's and free data usages. It also gives access to the Android Market which will give the users more than 200,000 applications. Both these handsets get access to Live TV and on-demand video playback services as well.

MTS ties up with Vodaphone for data services

Mobile service operator Vodafone has launched USB internet dongles under a new service line, NetCruise which essentially offers internet access through CDMA operator MTS‘ EVDO network. This was first reported by Telecom Talk, which also mentioned that the service is being run as a pilot in the selected cities of Pune (Maharastra), Mysore (Karnataka), Jaipur (Rajasthan) and Coimbatore (Tamilnadu). The NetCruise website also mentions the same in fine print : ” Vodafone Mobile’ branded services are being offered by MTS through a brand franchise with Mobile Commerce Solutions Limited (MCSL). MCSL will provide MTS with designing, marketing and servicing of ‘Vodafone Mobile’ branded products being powered by MTS.”
Similar to MTS’ MBlaze, the service offers prepaid and postpaid data plans with speeds of upto 3.2 Mbps. It also free browsing on Yahoo and Wikipedia websites.
Paying a Premium just for a Brand?
While the arrangement made by MTS is to leverage Vodafone’s premium brand equity, we fail to understand why the service is priced at a premium compared to MTS’ own data plans on the same network. For example, the Unlimited 799 plan on NetCruise has a fair usage policy cap of 3.5GB, after which speeds are throttled to 144 Kbps or 64 Kbps from upto 3.2 Mbps. MTS’ MBlaze offers a similar plan with a monthly rental of Rs 750 and the usage cap is 5GB. Clearly, the NetCruise service is charging a premium for the Vodafone branding.

This is not the first time that such tie-ups have been inked. A similar partnership, close on the lines of an MVNO (Mobile Virtual Network Operators), was established between Tata Teleservices and Virgin, to brand, market and support a separate service on the same network under the Virgin brand name, targeted at the youth.
Also, Future Group and Tata Teleservices run a GSM service under the brand name T24 Mobile in Karnataka, Gujarat, West Bengal, Jharkhand, Chhatisgarh, Orissa, Punjab, Haryana, Rajasthan, Uttar Pradesh, Tamil Nadu, Kerala, Madhya Pradesh, Mumbai and Maharashtra,which offers rewards to customers who shop at Future Group’s retail stores.
However, this tie-up doesn’t offer any value addition to the service except for the premium branding. Also, wouldn’t it confuse Vodafone’s existing and potential customers, since the service runs on a completely different technology standard, and might even affect the sale of its own 3G WCDMA/HSDPA based dongles? This is probably one reason why Vodafone does not even make a mention of the service on its own website.

MTS to decide on IPO after the introduction of NTP

Sistema Shyam TeleServices Ltd (SSTL), which operates its telecom services under the MTS brand in India, today said it would decide on the ways and means to raise funds, including the IPO, after the introduction of the new telecom policy.
"We are waiting for the the telecom policy to come before we can decide on our fund raising plans including IPO," SSTL President and CEO Vsevolod Rozanov said here today on the sidelines of celebration for MTS crossing two million customer base in West Bengal.
The new National Telecom Policy (NTP) is likely to come in October and the company expects it will provide a clear direction for its long term planning.
He further said the company is looking at ways other than IPO as well, to raise money for investments next year.
"There are various options before us and IPO is one of them. We are working towards it like having adequate independent directors, scaling up operations. However, work and investment will not stop if IPO does not come soon as there are alternate means of financing," Rozanov said.
The investment for 2011, was funded by capital raised from 17.14% stake sold to the Russian Federation.
Rozanov did not elaborated on investment plan for 2012, however he said the company is working to introduce Version B of CDMA technology for faster data movement by modems.
"By September (Q3) we will launch this new technology for trial in Rajasthan," he said.
This technology is nothing but EVDO-B which can offer faster speed to the users as compared to GSM 3G. MTS garners 28% of its revenue from non-voice, of which about 20% comes from data services.

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Interview: Sistema Shyam Keen to Acquire or Merge in India

NEW DELHI --Sistema Shyam Teleservices, which controls about 1.29% of India's 826.93 million-user telecom market, is looking to buy or merge with another operator in an effort to boost business.

"Sistema is definitely eager to take a step" but it has to wait for the government to finalize new regulations, said Chief Executive Vsevolod Rozanov.

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Sistema Shyam Teleservices

Chief executive of Systema Shyam Teleservices Vsevolod Rozanov.

He didn't sound very optimistic, saying that "I think we are very far from this," but this is the first time in recent months that a telecom operator has said it is interested in buying out or merging with another.
"Consolidation" is a key word these days, with intense competition hurting profits in the world's fastest-growing telecom market.
The competition grew due to the entry of new players in 2009, which led to call tariffs plunging to as low as half a cent a minute.
India now has up to 14 operators in most telecom service areas, and analysts say consolidation is inevitable.
Federal Telecommunications Minister Kapil Sibal, while unveiling the broad contours of a new telecom policy earlier this year, said the new rules expected later in 2011 will pave the way for consolidation, leaving about five-six operators in the country.
Mr. Rozanov thinks this will be difficult, but he too feels that India will be left with six operators--five private and one state-owned.
He said Sistema Shyam is open to buying or merging with an operator which offers services under the more popular global system for mobile communications, or GSM, technology. More than two-thirds of India's mobile subscribers use GSM phone services.
Sistema Shyam--which is 56.68% owned by Russia's Sistema JSFC (SSA.LN), 17.14% by the Russian Federation and the rest by India's Shyam Group--provides services on the less popular Code Division Multiple Access, or CDMA, technology, competing directly with Tata Teleservices and Reliance Communications.
Sistema Shyam has licenses to provide services in all of India's 22 service areas and offers telecommunications services under the MTS brand.
Commenting on a recent company decision to delay a planned initial public offering, Mr. Rozanov said "there is limited opportunity for us to realize value for our shareholders."
Apart from volatile market conditions, Mr. Rozanov also cited ongoing federal investigations into the alleged rigged sale of licenses and bandwidth in 2008, which have dampened sentiment in the sector.
IPO aside, Sistema Shyam has enough cash to meet its capital expenditure target of over $200 million to expand its business in 2011, hesaid.
The expansion plan includes a contract to ZTE Corp. for upgrading its networks to a newer technology.
The new technology, called Evolution-Data Optimized Revision B, offers better connectivity for data services such as multimedia.
The company plans to start offering services on this new technology in the July-September period.
Sistema Shyam's plans to expand its wireless broadband capability come after initial success for its high revenue data services, which now contribute about 25% of its overall revenue. The company, which follows a January-December financial year, reported revenue of 2.36 billion rupees in 2010.
Its average revenue per user--a key gauge of profitability for wireless telecom companies--for its mobile internet services was 250 rupees and 600 rupees per month for its prepaid and post-paid users, respectively. Its voice average revenue per user was 82 rupees a month.
Market leader Bharti Airtl's revenue per user is 194 rupees for the January-March period, with 15% coming from data services.
To push up its mobile internet revenue, Sistema Shyam is in talks with global computer makers to introduce tablet computers in the country later this year, Mr. Rozanov said.
And, despite the regulatory overhang and the intense competition, the company is still bullish on the sector, given that the country is adding more than 15 million new users every month, and that only about 33 of every 100 people living in rural India use mobile phones so far.
Sistema Shyam added about 800,000 new users in May, with about 88,000 being wireless broadband subscribers.
Combined with the expectation that call rates won't drop further, Sistema Shyam's plans to break even at the operating level by 2013 remain "on track," Mr. Rozanov said.
"We are on a risky track, a very harsh track... but on track," he said.

Sistema’s India operations losses widen Rs 663 crore

DELHI: Mobile phone company Sistema said losses from its Indian arm widened by 63% to Rs 666 crore for the three months ended March 31 and attributed the fall to rising cost of operations and additional capital expenditure to expand services to new regions in the country.


"The decrease in margin is on account of increase in operational costs due to further scale up operations across all circles. Additionally, the circles of UP East, West and Gujarat, were launched in the latter part of 2010, hence the impact of their launch was felt in Q1 2011," the telco, in which the Russian government recently picked up close to 20% stake,said in a statement. India's Shyam group has a minority 26% stake in the teleco.

Sistema Shyam's results are a pointer that expansion costs, interest payouts for thousands of crores in loans for putting up networks in new areas and lower usage by new additions outside metros and big cities will continue to squeeze its profits and margins of all new entrants that are struggling to make in mark in the ultra competitive 14-player market.

The company's consolidated debt stands at Rs 5,584 crore.The telco's losses widened despite its sales jumping three-folds to Rs 236.2 crore during January-March quarter of FY'11, as against Rs 78.6 crore in the same period last year.

For the first time, our revenue growth during the quarter was faster than our growth in wireless (voice and data) subscribers, the company said.The company's results however have two key pointer that indicate that underlying trends are still positive.

First, its blended Average Revenue Per mobile User (ARPU) for the quarter remained consistent at Rs 82, as against a declining trend in the market. But, this is still low when compared to incumbent GSM operators such as Bharti, Idea and Vodafone, whose ARPUs are close to the Rs 200 mark.


Next, against an industry average of 10-15%, Sistema said its data services offerings accounted for a quarter of its revenues. "Non voice revenues from both data and mobile value added services for the quarter (was) up by 33% Q-o-Q to INR 588 million (Rs 58.5 crore) which contributes 25% of total revenue and the same has increased by 2 percentage points for the quarter," the company added.

It also said that at the end of Q1 2011, the company had expanded its mobile data services to 130 cities in India, including all five metros. The number of data subscribers increased by 36% over Q4 '10 to 580,000. Currently, MTS' HSD services are present in over 150 cities, its statement added.