Sistema Sham Teleservices LTD (SSTL) will be resubmitting its application to the government by mid-April for increasing its foreign holding in the company beyond 74%. The Foreign Investment Promotion Board (FIPB) had last September turned down SSTL’s proposal to raise foreign holding beyond the current 74 per cent. The initial proposal had hit a hurdle over confusion about the proposed mode of investment. The Department of Telecommunications had said that the plan would need approval from the Reserve Bank of India , and not the department, as it had been structured like an overseas debt deal and not foreign direct investment.
DOT has provisioned for 100% FDI in telecom which means a foreign telecom operator no longer needs to find an Indian partner to set up operations in India. Under this rule UK based Vodafone and Norway based Telenor raised their stake in their respective joint ventures to 100% and now fully own their Indian arms. Sistema JSFC and the Russian government jointly hold 74% stake in SSTL and plan on upping it buy buying out Shyam telecom’s 24% stake in the JV.
SSTL currently has CDMA operations in 9 circles under the MTS branding. MTS currently gets nearly 50% of its revenue from data services. They did not participate in the recently concluded auctions citing high floor price of 800MHz spectrum but this move turned out to be highly miscalculated as they lost out on the chance of bagging spectrum in circles where they currently do not hold any, thus hampering their growth potential. MTS is now counting upon operators who managed to win spectrum in the auction to sign sharing deals with it once the government releases the final spectrum sharing and trading guidelines. MTS is also looking forward to more 800MHz licences coming up for renewal in 2020 and hopes to pocket some at that time.