MOSCOW (Reuters) - Russian oil-to-telecoms group Sistema may merge its Indian telecoms unit, Sistema Shyam TeleServices, with its key asset -- Russia's top mobile phone operator, MTS, analysts said on Wednesday.
"A merger of MTS and Shyam (the Indian asset) is only a matter of time... a year from now will probably be a good time," J.P. Morgan quoted Sistema's Chairman Vladimir Yevtushenkov as saying during Sistema's Capital Markets Day on Tuesday.
Sistema owns 73.7 percent of Shyam, which has more than 2 million fixed-line and mobile subscribers in seven Indian circles and has a unified pan-Indian licence and spectrum to provide cellular services in 22 Indian circles.
Analysts at Alfa-Bank said the timeline for the merger was subject to the improvement of Shyam's financial results, adding MTS Chief Executive Mikhail Shamolin had confirmed interest in the Indian market where Shyam is operating under the MTS brand.
"(Shamolin) stated that a decision on whether to merge Shyam into MTS would be taken at the MTS level, based on evidence that the Indian operation could deliver appropriate returns," Alfa-Bank analysts wrote in a note on Wednesday.
Sistema said in emailed comments the decision would be taken by MTS and there was no timeline for the deal.
"As far as I know, MTS has got clearly formulated financial criteria for assets acquisitions and corporate clearance procedure for such a deal. When Shyam stands on its own feet and complies with these requirements, this question could be specifically discussed," Yevtushenkov was quoted as saying.
MTS spokeswoman Yelena Kokhanovskaya said MTS had yet to decide whether it wants to buy Shyam.
(Reporting by Anastasia Teterevleva; writing by Maria Kiselyova; editing by Elaine Hardcastle)
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