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Sistema keen on spectrum sharing, trading; awaits guidelines

PTI New Delhi | Updated on March 24, 2015 Published on March 24, 2015

Sistema Shyam Teleservices, which is not participating in the ongoing spectrum auction, is now awaiting sharing and trading guidelines for airwaves for its business expansion.

The company expects negotiations and partnerships on spectrum sharing and trading guidelines to begin once the Government announces guidelines in this regard.

“In circles where we operate a good high speed LTE (4G), services cannot be rolled out without partnership as there is no contiguous block of spectrum available,” Sistema Shyam Teleservices (SSTL) Chief Executive Officer Dmitry Shukov said here today.

He was speaking on the sidelines of the company’s financial results announcement.

The company uses 800 Mhz, known as CDMA spectrum, to provide mobile services, but skipped the auction as it felt the base price fixed for the airwaves is too high.

The base price for 3G services per megahertz pan-India is Rs 3,705 crore.

The scarce CDMA spectrum has seen huge demand in the ongoing auction and about over two-fold jump in the base price in some areas.

“It is positive for us. Now, the owner of spectrum will look for partnerships to get quick returns on investment that he is making. More companies bidding for the 800 Mhz spectrum band is good for us. They will join us in developing an eco-system which we were driving alone earlier,” Shukov said.

Of the total 800 Mhz spectrum, 20 MHz is available for telecom services, which has been partially allocated to various players in the industry, including Reliance Communications and Tata Teleservices.

SSTL was the lone bidder in the CDMA spectrum auction held in March 2013 and the company purchased fresh airwaves in eight service areas only.

At present, the company has operations in nine circles — Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West), West Bengal, Rajasthan — out of 22 circles in the country.

When asked about the impact of the ongoing spectrum auction on its footprint expansion, SSTL’s Head of Strategy Ranjan Banerjee said, “There is lot of 800 Mhz band spectrum that will come up for renewal in 2020 held by competition. This auction does not block our future growth path. In fact it has helped us in driving the ecosystem for services, especially data.”

The company mainly focuses on the mobile Internet business, which is a major part of its non-voice revenue that contributes 47 per cent to its total revenue.

The company’s net loss widened to Rs 481.4 crore in the fourth quarter ended December 31, 2014, due to increase in forex losses.

“The forex loss on a year-on-year basis was about Rs 110 crore. This is not in our control,” SSTL Chief Financial Officer Sergey Savchenko said.

Published on March 24, 2015
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