Sistema Shyam Mulls Listing in India Next Year

NEW DELHI – The board of Sistema Shyam TeleServices Ltd. will meet Oct. 15 to decide on selling a stake to the Russian government via a fresh share issue, a top executive of the company's parent said Thursday.

"It (the stake) could be something in the range of maybe about 20%," Cheremin Sergei, deputy chairman of Sistema JSFC, told Dow Jones Newswires.

"We are in the stage of discussing the structure of transaction (with the Russian government)," he said, adding that the proposed deal may close by the end of December.

He didn't elaborate further on the stake sale plans.

Currently, Sistema JSFC owns 74% of the Indian mobile services provider while India's Shyam Group holds the rest.

Earlier in the day, Sistema Shyam Chief Executive Vsevold Rozanov said the company will explore listing its shares in India next year.

"We would definitely be looking (for a listing) next year," Mr. Rozanov told Dow Jones Newswires on the sidelines of an event to launch the company's services in the Indian capital. "We are not forced to be listed, but it (listing) will support our growth plans," he said, without elaborating.

Mr. Rozanov said Sistema Shyam is looking at breaking even at the operating level in the next three years, and expects to have 30 million users by then.

Sistema Shyam is one of the newer entrants in India's mobile-phone market, the fastest growing in the world based on the number of subscriber additions.

A listing could provide the company funds to sustain its expansion plans in the highly competitive Indian market which already has about eight service providers in each of its 22 telecom service areas.

Last year, Sistema Shyam entered into a tie-up with Russia's Mobile TeleSystems to launch mobile services under the MTS brand in India.

It currently offers wireless services on the code division multiple access, or CDMA, platform in seven telecom services areas.

"The company is now in the process of outsourcing its telecom network management before March 2010," Mr. Rozanov said, adding, it is negotiating with service vendors.

It is also considering outsourcing management of its information-technology requirements, he added.

The company has signed contracts with about 10 telecom tower companies to share infrastructure for a faster roll out of operations at a lower cost, he said.

On the upcoming auction of bandwidth for third-generation mobile services in India, Mr. Rozanov said his company has a "principle interest" to bid,, Mr. Rozanov said his company has a "principle interest" to bid, but it is awaiting clarity on bandwidth allocation for CDMA-based telecom services. He didn't elaborate.