License issue of Sistema Shyam Teleservices has taken to international level, as Russia warned to go for international arbitration in case Indian courts do not resolve Sistema's licenses. Alexander Kadakin, Russian Ambassador in a cultural event in New Delhi said, “If the issue of cancellation of 2G licence to Sistema is not resolved in Indian courts, we will go for international arbitration,”
The Supreme Court of India cancelled all licenses issued on or after January 10, 2008 on the ground of irregularities during spectrum sale. This verdict affected 21 of 22 licenses of SSTL (Sistema Shyam Teleservices), which operates under MTS India brand. The company has submitted a petition with the apex court seeking a review of the decision to cancel licences and also decided not to participate in the upcoming 2G spectrum auction. Sistema's point of view is they applied for CDMA spectrum on 800 MHz band where there is no demand, while other players went for GSM 1800 MHz band.
Till date Sistema, who owns 56.68% of the company, invested $3.1 billion in this Indian telecom venture. Russia previously asserted it will not allow this huge investment go waster for internal problems in the country. Russia Govt. holds 17.14% shares in SSTL and is very unhappy on this issue, said that “great repercussion” of this issue will affect not only on Indo-Russian bilateral cooperation but also for its foreign investments in India.
There are also reports that the Department of Telecom (DoT) is going to support the curative petition filed by Sistema in the Supreme Court challenging cancellation of its licenses in 21 circles.
