Telecom firm Sistema Shyam Teleservices (SSTL) on Monday said that the company’s debt will decrease this year as uncertainties in the operating environment are going away.

The Russian conglomerate has been struggling hard in India with licensing issues over the last one year, but now as things are clear, the company said that it has new strategy that will focus on strengthening the brand and creating number one player in data services segment.

“We have gone through some tough times over the last 12 months, but the doubts and the ambiguity are now over. SSTL’s debt was substantially reduced in 2012 by Sistema and the total debt is anticipated to fall further this year,” Vsevolod Rozanov, President and Chief Executive Officer, SSTL, said.

While the company’s debt was at $1,047 million during 2012, it is expected to come down to $700 million this year, he said.

Total cash requirement on financing of operations and capacity expansions will also come down over the next two years.

“Cash requirements in 2014 and 2015 are expected to fall to around $250 million per year. One-off restructuring costs spread over these two years may be reduced further,” he said. The company had spent $561 million last year.

Rozanov said that though the company is present in fewer circles, still there is a vast data and demographic potential. There is a need for lower fund requirement and easier road to breakeven through its existing strong data franchise.

The company also has the advantage of not paying for licence this year because of offset of licence costs paid in 2008 ($ 296 million), which accounts for 45 per cent of the reserve price.

Therefore, "deferred payments from 2016 will amount up to $73 million per year for 10 years'', he added.

ronendrasingh.s@thehindu.co.in

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