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Sistema Meets Frequency Opposition
AFK Sistema announced yesterday that Foreign Investment Promotion Board in India have approved its increasing its share in Shyam Telelink to 74 percent, the maximum a foreign company is allowed to own in an Indian Telecommunications company. Sistema bought 10 percent of Shyam in September. The next step under its purchase agreement is to buy another 41 percent in the Indian holding for a total price of $58.1 million. The last 23 percent is to be acquired before the end of May 2009.
Shyam Telelink offers CDMA 800-standard cellular telephone service in the state of Rajasthan in northwestern India. It controls 0.05 percent of the Indian market, with 99,600 subscribers as of the end of August and 150,000 landlines, making it the smallest cellular operator in the country. Its 2006 receipts were over $30 million. It filed an application last year in a competition to provide CDMA-800 and GSM-1800 service in 21 Indian states last year, which is its greatest attraction to Sistema. The competition will also award one of the last free sets of GSM and CDMA frequencies in India. Under Indian legislation, a full frequency package and the license for it costs $450 million.
In October, Shyam won a competition declared at the end of 2006 for GSM service in Rajasthan. It has not received the frequencies for that service yet because of a suit filed by members of the Cellular Operators Association of India. They are disputing the awards of GSM licenses to Shyam and two other operators, saying that Indian law prohibits the simultaneous use of CDMA and GSM networks without special permission.
www.kommersant.com
All the Article in Russian as of Dec. 05, 2007
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