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Updated: April 15, 2013 21:54 IST

Sistema Shyam to focus on data services

Staff Reporter
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Vsevolod Rozanov
Vsevolod Rozanov

The company will invest $200 million to upgrade its networks to offer 4G services

Sistema Shyam Teleservices (SSTL), on Monday, said it aimed to become the number one data operator in the country as “India offers an unrivalled data growth story”.

“We have gone through some tough times over the last 12 months, but the doubts and the ambiguity are now over. The uncertainties in the operating environment led us to re-evaluate our operations more thoroughly and we now have a leaner and more fundamentally robust data-focused business in India,” Sistema Shyam TeleServices President and CEO Vsevolod Rozanov said.

The company, which operates under the MTS brand, said it would invest about $200 million (about Rs.1,110 crore) to upgrade its networks to offer 4G LTE (long-term evolution) services and expects to “reach nine circle OIBDA (operating income before depreciation and amortization) breakeven point at the end of 2014 and the first half of 2015.”

“SSTL has a far enhanced networkand a clear road map to LTE. Our network is easily upgradable with the expenditures to be spread over several years,” he said.

The Russian conglomerate said the company’s debt would decrease to $700 million this year from $1,047 million in 2012.

“The year 2013 is building up to be an exciting year. Our focus will be on developing a stronger data franchise, restarting the smartphone business and harvesting voice segment,” SSTL said.

A third of SSTL’s ARPU (average revenue per user) is accounted by data revenue and this number is expected to grow at a solid double digit rate in short and medium term, the company added.

The services will be focussed mainly on tier-2 and tier-3 cities.

SSTL recently won 3 blocks of 1.25 Mhz each in eight telecom circles — Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) and West Bengal — for Rs.3,639 crore. It already has operations in the Rajasthan circle.

SSTL last week reported reduction in net income losses at Rs.778.7 crore for the three months ended December 31, 2012. It had a net loss of Rs.1,197.70 crore during the same quarter a year ago.

The OIBDA loss of the company almost halved to Rs. 278.60 crore during the reported quarter.

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