Russia investing in Sistema’s Indian mobile company

Russia will invest the equivalent of US$600 million in Sistema Shyam TeleServices Limited (SSTL). The money will come in Indian rupees from funds owed by India to Russia, Sistema said.

Sistema is a shareholder in companies operating in different industries, including mobile services operator Mobile TeleSystems (MTS). SSTL has entered into an agreement with MTS to launch its Indian operations under the MTS brand.

SSTL indicated in December last year that the Russian government would be taking a 20 percent stake in the company. A decision was taken at a shareholder meeting in December to allot additional equity to both the Russian government and the Indian promoters. By this move, the foreign equity in the company would stay within the 74 percent required under Indian rules.

The additional funds from the investment by the Russian government will be used by SSTL for increasing its wireless broadband internet coverage, expansion of its branded retail network, and for the launch of operations in new service areas, Sistema said.

SSTL, which holds licenses for offering services in 22 service areas in the country, has so far rolled out services in 12 service areas.