Sistema Shyam Plans Plea Against License Cancellation

NEW DELHI -- The Indian unit of Russia's Sistema JSFC is preparing to file an appeal asking the Supreme Court to review its order cancelling the company's telecommunications licenses along with those of several others.
"We think there are good reasons to believe that we can be successful [in the review petition]," Vsevolod Rozanov, president and chief executive at Sistema Shyam Teleservices Ltd., said Tuesday. "Our overall management is finalizing the steps."
In case the review petition is unsuccessful, Sistema Shyam plans to file a curative petition.
According to Indian law, an individual or company can apply for a review of a Supreme Court ruling within 30 days of the judgment. If that is dismissed, another plea--termed a curative petition--for reconsidering a judgment can be filed.
Sistema Shyam Teleservices is 17.14%-owned by the Russian government, 56.68% by Sistema and the rest by India's Shyam Group.
The company has invested more than $3 billion and provides services on the Code Division Multiple Access, or CDMA, technology, in all of India's 22 service areas under the MTS brand. It has 15 million users.
India's Supreme Court last week ordered the cancellation of 122 mobile telecom service licenses--including 21 of Sistema Shyam--issued without auction after January 2008. The ruling, which will be operative after four months, came on complaints of corruption in the allotment of the licenses.
Sistema Shyam follows Tata Teleservices Ltd. in stating that it will file a review petition. Tata Teleservices' three licenses are affected due to the court order.
Mr. Rozanov said the Russian government is "concerned," and is being apprised on the developments.
Russian government officials couldn't be reached for comments. They may get involved in discussions with Indian authorities to protect Russian investments.
Norway's information technology minister has already met India's communications minister to discuss the license cancellation of the Indian unit of Norwegian company Telenor ASA.
Sistema Shyam still has faith in the potential of the Indian telecom market, which is the second biggest and the fastest growing in the world. It plans to participate in the auctions that India's telecom department has to conduct within four months to real lot the licenses and bandwidth, Mr. Rozanov said.
"We have invested huge money, we do believe in India and we do believe in the opportunity," Mr. Rozanov said.
For now, its business usual for Sistema Shyam. It isn't planning any layoffs or cutting its contracts with vendors, he said.