Following the cancellation of 122 2G licenses by Supreme Court of India all new operators lost the permission to operate in the country after a certain period.
It hits the foriegn partners of the affected mobile companies as they are the majority shareholders in those joint ventures and invested some thousand crores of rupees in the country.
Sistema JSFC, the majority shareholder (56.68%) in Sistema Shyam Teleservices Ltd (SSTL) has invoked its right to protect its investments in India as 21 licenses of SSTL was cancelled on February 2, 2012. SSTL offers CDMA mobile and data services in India under MTS India brand.
Sistema today announced that they have invoked its right under Article 9.1 of the Bilateral Investment Treaty (BIT) signed between the Government of the Russian Federation and the Government of India for the Promotion and Mutual Protection of Investments dated 23 December 1994 which came into force on 5 August 1996.
Article 9.1 of BIT provides an Investor from one Contracting Party and the other Contracting Party with an opportunity to amicably resolve a dispute arising in relation to investments made by the Investor in the territory of the State of the other Contracting Party. The procedures for the amicable resolution of such disputes include conciliation procedures under the Conciliation Rules of the United Nations Commission on International Trade Law.
Sistema in accordance with Article 9.1 of the BIT has sent a formal letter through its legal counsel to the Republic of India notifying India of the existence of the dispute and proposing to settle the dispute in an amicable way within 6 months (28th August 2012). A copy of the letter has also been sent to the Indian Embassy in Moscow.
As stated in the BIT, the Government of India is obliged to promote and protect foreign investments, including treating the investments in a fair and equitable way, providing them full protection and security, and not expropriating the investments.
Sistema believes it has a strong case and reserves the right to commence proceedings against India before an international arbitration tribunal set up in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) and/or in any other available forum if the dispute is not settled amicably within the deadline of 6 months.
Telecomtalk’s Take:
SSTL has already established their presence in Indian mobile and wireless data market under MTS brand. At this moment they cannot leave the market like Batelco or Etisalat.
This legal action by Sistema is a master stroke and holds their rights stronger than anything like filling petition against the court order. Indo-Russian business relations are always in a good shape for a long time and Russian Govt also has some stakes in the joint venture, Sistem Shyam Teleservices. So Govt of India must have to think to protect Sistema’s investments in India at any cost.
This step by Sistema will relieve all the employees, subscribers and public shareholders of Sistema Shyam Teleservices. Now it is high time for Telenor how they will protect their investment in the joint venture Uninor.
Revolution April 5, 2012 at 10:20 pm
Revolution April 5, 2012 at 10:04 pm
I would like to bring few facts to everyone’s notice.
* BSNL has the Finest and Widest Network Across India including Rural Hinterland.
* But No one wants BSNL to be the Finest Telecom Company.
* No One Includes – BSNL CMD and Other Higher Officers, The Ministers, The Private Telecom Operators etc.,
* The Top BSNL Managers actually work for the Private Telecom Operators.
* They dont want BSNL to provide Good Service, Coz it will affect Private Operators.
* They Dont want BSNL to Grow. They prevent the Customers of Private operators from contacting BSNL for Queries. Example: In BSNL Advertisements they display a Contact number which can be dialled only by Existing BSNL Customers, Like 1800 number of 5 digit number.
THERE ARE 100′S OF SUCH POINTS TO PROVE IT. I WILL BRING ALL OF THEM AS SOON AS POSSIBLE. ONLY A REVOLUTION CAN SAVE OUR COUNTRY, INDIA.
Subhendu Mukherjee March 1, 2012 at 2:55 pm
@Avishek Ghosh
Yes MTS in Kolkata has also improved tremendously both in voice quality and EVDO Data. Signal penetration is also very good now-a-days. All best wishes to MTS !!!
Raghu March 1, 2012 at 12:17 am
@Praveen
These BSNL people have not changed till now in picking up the phone call and it just keeps on ringings and no one agrees to pick up the call.The call centre people do not know anything properly. i can only Say BSNL Broadband services are good
Avishek Ghosh February 29, 2012 at 11:23 pm
So what?every company shares their infra. with others…
Avishek Ghosh February 29, 2012 at 11:21 pm
BSNL is not cheaper…i am using 49 INR/year promo with my bsnl number & getting Bsnl@49 p/mint,Others@69 p/mint,STD@70 p/mint.(it is the lowest plan bsnl offers in WB circle)
& I am also using MTS as my primary number….i am using 95 Promo which is valid for lifetime,& the tariffs are on-net & off-net both@1p/2sec,std@1p/1 sec.
MTS has much better network quality than bsnl,if i give bsnl 4/10,I am giving MTS 7.5/10.& regarding coverage,now there is very minimum difference b2in bsnl & MTS…
BSNL is available in bigger geographical location than MTS,but quality is better than quantity….
Rupesh February 29, 2012 at 4:31 pm
@Ravi Shekhar
@Ravi Shekhar
yes man the condition of bsnl is really worst in jharkhand area, plus the tariff plans which they offer are also the costlier one which can’t be afforded by a common student for example one has to recharge with a validity voucher to get validity while other companies offer validity without paying a single rupee. The other darker side of bsnl is that it doesn’t offer any gprs plan on daily or weekly basis . It’s gprs plan starts with 100 plus rupees, now you tell me in which way it is a better company(from student point of view)
Subhendu Mukherjee February 29, 2012 at 2:23 pm
For the last 3 months BSNL Landline Broadband is giving an average speed of 0.5 to 0.8 Mbps with high rate of latency. Most of the time there is no data transfer although the connection is active. On several complaints only phone calls from incompetent cc representatives. The person calling doesnot have the professional competence to highlight a possible solution to a technical problem !! Rs 500 combo plan for 1.5 gb 30 days is really a waste now with BSNL LL.
RDB February 29, 2012 at 1:47 pm
The point I am paying and not getting proper service from an operator. Why should I use it? This is the problem with BSNL – STVs are costly at par with incumbent operators, no proper customer care services and when network goes down the recovery time is longer than any operator.
Praveen February 29, 2012 at 12:43 pm
Don’t support BSNL. It’s employees are looting it & people money in name of PSU organization. BSNL is paying 50% of it’s revenues to it’s employees. When you pay 50% of ur revenue to your lazy employees how can you upgrade your infrastructure and provide better service to consumers. I agree it had towers in all rural parts of India but it is not from its revenues or internal accruals but it laid all those towers from funds from Universal Service Obligation Fund (USOF) to which every operator pays for every minute used.
Just once have a problem with BSNL service and deal with them directly for issue resolving then you will understand how these guys are looting the PSU money
myself February 29, 2012 at 11:19 am
@avisek
Are you kidding me?…. BSNl is a shame to the word partiotism they take the reciever off their phones during working hours so that noone can call them. the only thing good about BSNL is that they have good plans, so maybe a few people are indeed concerned of running the company the rest are just incompetent.
muthu February 29, 2012 at 7:44 am
BSNL IS BEST NETWORK,PEOPLE NETWORK……….
Ravi Shekhar February 29, 2012 at 12:37 am
BSNL is not a reliable operator.In some rural and suburban region of Bihar and Jharkhand I have faced d prblm of no coverage,even in coverage areas network goes off for many hours(sometimes for 2-3days)and u have to scan many recharge outlet to get BSNL coupon/recharges,believe it or not this is the real face of BSNL. If u belongs to urban area then u must be unaware of the worst side of BSNL.
siddharth February 28, 2012 at 11:45 pm
@vasu
do you know that mts works on bsnl cdma network. Where MTS network is not available.
siddharth February 28, 2012 at 11:43 pm
@Ravi Shekhar
yes my friend you are right BSNL does not make profit because its first of all a psu and main objective of PSU serve people BSNL has obligation to serve nation and not few people..and their investors.
BSNL operate even in losses because of its liabilities it went to losses because it had obligation to buy the 3G spectrum at the highest quoted price in all the circles. it also focuses on villages which i dont thing any off your said good companies are doing.
comparing all the operators I think BSNL is the cheapest … and if you are calculating about 30p tarrif then please calculate all the vouchers and at the end what is the actual cost for that you are paying … Network wise BSNL is very good compared to other network … cannot say better than voda but better than rest .
Prasad February 28, 2012 at 11:41 pm
Even i do.
vasu February 28, 2012 at 11:27 pm
BSNL/ MTNL is an national company but what is the use when it cannot offer reliable services , moreover why does it not provide 1/2 ps / sec tariffs like MTS…. If it does both i will definately take BSNL any time
Arka February 28, 2012 at 11:10 pm
Good analysis by TT. I support TT’s think.
Ravi Shekhar February 28, 2012 at 11:06 pm
Does BSNL make any profit ????? BSNL has very poor availability,even worse than idea.
Steve February 28, 2012 at 11:05 pm
if i get the same tariffs iam 100% i will use bsnl
Dhananjay February 28, 2012 at 10:21 pm
yes .. totally agree…
sachin February 28, 2012 at 9:46 pm
we are looking for good service and that we dont get from bsnl for that we have to depend on private operators @avisek
avisek February 28, 2012 at 9:24 pm
hii.my frnds Don’t forget this all are forign operator.THEY DO BUISNESS TO DEVOLOP THEIR COUNTRY.THIS IS A EXAMPLE LIKE BRITISH.USE BSNL,THIS IS NATIONAL COMPANY WHO GENARATE REVENUE TO DEVOLOP OUR NATION.NOW CHOICE IS YOURS.WHICH COMPANY DO U FAVOUR?
jitu February 28, 2012 at 9:12 pm
I am having MTS Blackberry handset and it doesn’t have sim in it. So if MTS move from india than i will be very unhappy because i have to leave this headset along with number (as UPC code is not generated in Blackberry handset). I request Indian Government to take care of MTS users.
Amit February 28, 2012 at 8:59 pm
This is indeed a good move, customers of MTS will have a big relief.
But at the same time I am trying my best to get the UPC code in case if there is an issue, but unfortunately after many ties MTS is not generating the porting codes in-spite of making complaint.
Me February 28, 2012 at 8:55 pm
This is called “pohcha pakad ke gala dabana”.
pratik February 28, 2012 at 8:53 pm
sistema is smart .
they invoked proper rule and at proper time.
India has far more benefits to get from Russia than other way round.
I am sure MTS and sistema are almost saved .
russian govt. indeed holds stake in MTS so it will be doing maximum possible to save this joint venture and its in indian interest to save this venture.
Jagan T February 28, 2012 at 8:37 pm
Good move Sistama. Its the time for the corrupted blood sucking politicians and stupid red tape laws through out of the country.
lawyer boy February 28, 2012 at 8:37 pm
India and Norway donot at present have a Bilateral-Investment-Protection-Agreement, negotiations are still underway and hence Telenor can’t envoke the same provisions as Sistema. However Telenor’s investment was routed into India through Singapore and Telenor could envoke clauses under CECA relating to investment.
For the authors knowledge-
Diplomats from Norway have already engaged talks with the Govt. This happened very soon after the SC order. Telenor doesn’t have to get hostile to protect their investment, there are diplomatic channels through which the matter can be resolved. Considering that like Russian govt. stake in Sistema, the govt of Norway has a 54% stake in Telenor. The Indian govt can’t risk a political conflict with so many affected parties. Our govt. is fully capable of finding a way out. Telecomtalk isn’t the only party concerned with the SC decision.
ravin February 28, 2012 at 7:30 pm
It is foolish to throw baby with bathwater. Punish those who indulged in corruption but don’t stifle competition by revoking licences. I wonder where is the mention of consumer in this 2G affair, as everyone, including media is wailing about the loss to exchequer. The government is trying to milk as much as from competing cartel members so that they could be given free hand to loot the hapless consumers. The consumer and his right to enjoy reasonably affordable celluar and others services on the basis of radio waves being the natural resources being the national wealth as water and air, should occupy the centre state in this issue. What does the government do with all the money it gets from auction? Wasting away in the guise of some grandiose scheme like food security? Paying cores of rupees to idle employees in the name of reviving sick industries as was reported in the media?
SRINIVAS February 28, 2012 at 7:20 pm
yes what is MTS mistake if it trusts indian govt laws at that time,they should not be penalized for some ministers corruption,
anupam February 28, 2012 at 7:14 pm
good initiative by sistema to bring in Russian govt and international trade law in the scene . Telenor can also initiate with norway govt
Ravi Shekhar February 28, 2012 at 7:09 pm
Well done MTS!
Chirag February 28, 2012 at 6:22 pm
Really a master stroke by Sistema, I am sure that Telenor will also pressurize in the similar manner!
I won’t be surprised if just some additional lump-sum is charged to stay in Indian market for those companies.
Or the company will ask Raja to pay the additional licence fee…
chaitanya das February 28, 2012 at 5:51 pm
As per my concern, there is no comapany will leave INDIAN MKT, it may just change of brand name or nothing will happen.Indian Govt will make some relief for all companies cancelled.