Sistema Shyam wins back licenses in 8 circles

Dylan Bushell-Embling
12 Mar 2013

India's Sistema Shyam Teleservices, the sole bidder in the latest round of India's 2G spectrum re-auctions, has secured licenses in eight of the 11 telecom circles in which it had been operating.

The company will pay $665 million for 3.75 MHz of 800-MHz spectrum – in three 1.25 MHz slots – in the eight regions, Russian parent Sistema announced yesterday.

The eight circles cover the areas of Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) & West Bengal.

Sistema Shyam also retains spectrum in Rajasthan, which was not affected by last year's court order declaring licenses held by the operator and seven others invalid.

But Sistema Shyam will likely have to shut up shop in Mumbai, Maharashtra and Uttar Pradesh (East), where it no longer holds licenses. The operator had an estimated 1.5 million subscribers in these regions.

Sistema said it elected not to bid for spectrum in these regions due to factors including spectrum pricing, competition and future data potential.

Sistema Shyam's remaining licenses cover around 10.45 million of its customers and 75% of its current revenues, the company said. The nine circles also collectively cover around 60% of India's current data market.

The spectrum auction was the government's second scheduled process to reallocate the spectrum freed up from the license cancellations.

The first-round auction also drew a muted response, with operators complaining about the high reserve price conflicting with the financial realities of the highly competitive Indian market.

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