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Sistema Shyam TeleService Ltd, which has licence to offer mobile telephony services in 22 circles in India, today launched its first greenfield service in Tamil Nadu, under the brand ‘MTS’.
As an introductory offer, SSTL gives away one million minutes of free talk time to its customers. The company has set a limit of 150 minutes a day.
The benefit is available to the customer for life, but the offer itself is for a limited period. Company officials have declined to specify until when the offer is open.
SSTL is 74 per cent owned by Sistema of Russia and the rest by Shyam Telecom group of India. Shyam Telecom entered into mobile telephony with a licence for Rajasthan, but SSTL has since taken over the operations in the State. As such, today’s launch was SSTL’s first greenfield launch in India.
Addressing a press conference here today, Mr Vsevolod Rozanov, President & CEO, SSTL, said that the company plans to take the services to 560 cities and towns in Tamil Nadu within a month. Also, the company will launch its services in Kerala next week, he said.
At present, SSTL is offering only pre-paid services, but plans to provide post-paid too, later.
The services will be under the brand ‘MTS’, which is the Sistema group’s brand for mobile telephony the world over.
MTS is also a company of the group, listed on the New York Stock Exchange, which provides these services globally.
There is an agreement between MTS and SSTL that allows the Indian joint venture to use the MTS brand and also access MTS technology and expertise, Mr Rozanov said.
The Rajasthan operations, currently under the brand ‘Rainbow’, will also be changed over to ‘MTS’.
SSTL has an investment programme worth $5.5 billion, of which it has so far invested $2 billion (including the fee for spectrum). The company expects to break even in 6-7 years. Mr Rozanov said that India’s macro-economic parameters inspire confidence. He also noted that India’s teledensity is very low – 34 per cent – and about 800 million people are waiting to be connected.
SSTL has been allocated spectrum for CDMA technology, which, according to Mr Rozanov, is superior to GSM. In India, most mobile subscribers are customers of ‘GSM operators’. CDMA operators (such as Reliance, Tatas) have 27 per cent market share.
Asked about the status of the Russian Government’s move to pick up (a reported 20 per cent) stake in SSTL, Mr Sergey Cheremin, Executive Vice-President, Sistema, said that negotiations were on between (the privately owned) SSTL and the Russian government.
He could not say whether the Russian Government would be given fresh shares or would buy a part of Sistema’s holding. Nor could he say how much the Russian Government would invest in SSTL.