Russian Government May Be Preparing to Take Stake in Indian Operator

The Russian government is reported to be preparing to take an indirect stake in an Indian mobile phone network, local media reports have suggested. According to a copy of the government budget, Russia has set aside 23.7 billion rubles "for acquiring shares in the joint venture Shyam Telelink," - a new Indian mobile phone network.

A source close to the deal told Kommersant the funds would go to buying a 20 per cent stake in Sistema Shyam TeleServices

The firm is controlled by Russia's Sistema, which has built up a 73 percent stake in the Indian operator. Sistema also controls the Russian and CIS operator, MTS.

The newspaper reported that the deal would enable Sistema to retain a majority stake in the Indian operator, and Russia would buy the shares as part of a plan to settle New Delhi's outstanding Soviet-era debt to Moscow.

Shyam Telelink aims to secure 35 million subscribers by 2012, which represents approximately 7% of the Indian market. Altogether Shyam Telelink now has spectrum in 22 Indian circles, covering 28 administrative states and 7 union territories with a population of approximately 1.1 billion people.

Posted to the site on 18th March 2009