RusTele.com

Russia's Sistema 'disappointed' by Indian telecom ruling

Russian conglomerate AFK Sistema Friday expressed disappointment with a ruling by India's Supreme Court to cancel second-generation, or 2G, mobile licenses and called for the Indian government to respond.

India's Supreme Court on Thursday canceled more than 100 licenses for mobile-phone services issued in 2008, raising uncertainty over billions of dollars of foreign investment into the country's telecommunication industry.

Sistema's Indian telecom business, Sistema Shyam TeleServices Ltd., secured 2G licenses in 2008 and was one of the companies affected by the ruling.

Sistema Shyam has pan-India operations under brand MTS and its 21 out of 22 licences stand cancelled after the apex court verdict yesterday. The order was issued on the grounds that these licences were not granted in accordance with required procedures by the Department of Telecom.

Sistema said in a statement it is "very disappointed" by the Supreme Court's decision.

"In essence, Sistema and Sistema Shyam TeleServices are being penalized for acting in good faith and in reliance on the appropriateness of the procedures established by India's telecommunications authorities," the company said.

The company said its business in the Indian operations will remain operational as usual and it is reviewing the implications of the Supreme Court judgement that cancelled 122 telecom licences terming them as illegal.

"To safeguard its interests, Sistema and Sistema Shyam TeleServices Ltd (SSTL) will contest this order by pursuing all available legal remedies. In the meantime, Indian operations will remain business as usual for the company," Sistema JSFC said in a statement.

Sistema and the Russian government together hold about 74 per cent stake in the Indian joint venture. India-based Shyam Group has 24 per cent stake, and others 2.18 per cent.

"Sistema by way of its investments in SSTL has fully demonstrated its commitment to its Indian operations and is very disappointed by the Supreme Court's decision," the company said.

SSTL, a national telecom operator serving more than 15 million customers, employs over 3,500 employees. It has made investments of over $2.5 billion.

"The company looks forward to a clear, transparent, and equitable policy decision on these matters by the Indian government," the company added.

The affected companies whose licences were cancelled include Uninor (joint venture between Unitech and Telenor of Norway), Videocon, Loop Telecom, Idea Cellular, Etisalat DB (joint venture between DB Realty and Etisalat of UAE) among others.