Sistema Shyam open to merger

Melissa Chua
27 Jan 2011

Sistema Shyam Teleservices has indicated that a merger with one of the country’s top seven telecom operators could be on the cards.

The company would, however, have to cross the hurdle that is the government’s rules on mergers and acquisitions, president and CEO Vsevolod Rozanov said.

Rozanov’s statement follows India’s telecom minister Kapil Sibal’s December announcement that the government would be exploring regulatory changes on consolidation to assist the survival of smaller operators in India’s crowded telecom market.

Sistema Shyam, the only cellular provider in India that operates solely on CDMA technology, is a joint venture between Russian powerhouse Sistema and India’s Shyam Teleservices. The company offers services under the brand MTS.

While 80% of the company’s revenue comes from voice, Rozanov said the company was hoping to cash in on the increase in data demand. He said the company was adding 60,000 to 70,000 data customers a month, which should lead to an increase in ARPU.

A report in the Hindustan Times earlier this year said Sistema Shyam was likely to come up with an IPO by year-end, but this could face barriers in the form of a “not-so-positive industry outlook.”

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