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Sistema Shyam wins spectrum in 8 circles for Rs 3,639 crore

Sistema Shyam wins spectrum in 8 circles for Rs 3,639 crore

New Delhi: Sistema Shyam TeleServices, the Indian mobile phone unit of Russia’s Sistema, won airwaves in eight cellular zones in the country with its sole bid of Rs 3,639 crore (36.39 billion), Telecom Secretary R. Chandrashekhar stated here on Monday.

The government is using spectrum auctions and stake sales in state-run companies to contain its deficit to within 5.2% of GDP this fiscal year and 4.8% in the next fiscal year that starts in April.

The country is struggling, however, to sell airwaves to carriers stressed by heavy debt loads and who have mostly shunned the bidding process, complaining that base prices set by the government are too high.

The government raised less than a quarter of its $7.4 billion target in a November auction and had initially planned to sell airwaves worth at least $7.9 billion at Monday's auction.

It had to scrap the sale of two key frequency bands that are used by operators of the popular GSM technology and account for about 85 percent of the total value of the airwaves due to lack of participants.

The government is expected to cut prices for the unsold airwaves at the next auction, the details of which have yet to be finalized.

Sistema Shyam TeleServices, which saw its permits revoked in 21 service areas after an Indian Supreme Court ruling covering a scandal-tainted award process in 2008, won the airwaves at the minimum bid price, which had already been cut by about half after no companies bid for the band in November.

Sistema Shyam, which operates on the Code Division Multiple Access (CDMA) platform, had earlier said it would cease operations in 10 zones and bid in select areas.

Sistema Shyam won three blocks of airwaves in Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) and West Bengal. The company did not bid for Mumbai, Maharashtra and UP (East) zones and said it would shut down operations in those zones and will ask customers to shift to other carriers.

The firm said it would be allowed to offset against the auction payments Rs 16.26 billion it had paid for previous permits that were ordered to be revoked. It will pay the remainder in 10 annual installments starting March 2016. The government expects revenue of Rs 408.5 billion from airwave surcharges, auction of spectrum and licence fees in FY2013-14.

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