Sistema Shyam Teleservices wins airwaves in 8 circles for Rs 3639 crore - Economic Times

NEW DELHI: The Indian arm of Russian conglomerate Sistema, the sole bidder in the second round of spectrum auctions, won airwaves in eight circles for Rs 3,639 crore, but will make its first payment for these radio frequencies after three years. Though the Centre managed to sell only 40 per cent of the airwaves on offer, telecom secretary R Chandresekhar described the auctions as a success since it has helped 'establish the market value of CDMA spectrum'. "In value terms, we have sold 56 per cent of the airwaves. I think the sale process has put pressure on Sistema to focus on areas which they think are important and viable and hence they may have bid for only eight circles," he added. Post the sale process, Sistema's footprint has shrunk further as it did not bid for frequencies in three regions — Mumbai, Maharashtra and UP (East) — where it currently operates. Last month, it has scaled down its pan-India presence to just 11 of the 22 circles in the country. The government has allowed Sistema Shyam Teleservices Ltd (SSTL) to offset or adjust Rs 1,626 crore — the fee it paid for licences in 2008, which were subsequently quashed by the apex court last year — against its bid amount in the current sale. According to auction rules, Sistema is required to pay only a fourth (25 per cent) of the bid amount upfront, with the rest to be paid in 10 equal installments with interest, beginning from the fourth year of its licence period. The company spokesperson said that Sistema would offset the entire Rs 1,626 core as the upfront fee and then pay the balance in 10 equal annual installments of Rs 200 crore each (with interest) from March 2016 onwards. Sistema-Shyam, which offers mobile services here under the MTS brand, had stayed away from the first round of spectrum auctions in November citing high reserve price. In the November auctions, the Centre garnered just Rs 9,407 crore from 2G spectrum bids, less than a quarter of what it had expected, and Norway's Telenor and Videocon, which had lost pan-India permits won back spectrum in six circles each. Idea Cellular, which lost operational permits in seven circles, had bagged airwaves in all these regions, and got one block of additional airwaves in Bihar while incumbent operators, Vodafone and Bharti Airtel, won additional airwaves in 14 and one circle, respectively. Market watchers said the entire auction process was a failure when compared to the 3G and 4G spectrum auctions in 2010 that took 34 days and 16 days, respectively and fetched over Rs 1 lakh crore, where successful bidders paid up the entire bid amount within 10 days of the sale process. "It has now become imperative for the government to relook into spectrum's reserve price evaluation methodology in order to encourage more participation in future," said Prashant Singhal, Partner in member firm of Ernst & Young Global. The Centre was forced to restrict the upcoming spectrum auctions to just the 800 MHz band used by CDMA operators as there were no bidders for the other frequencies. Post the sale process, Sistema's footprint has shrunk further as it did not bid for frequencies in Mumbai, Maharashtra and UP (East). via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNE1IUTffumJpgose0FJRfH8Q9cKDA&url=http://economictimes.indiatimes.com/news/news-by-industry/telecom/sistema-shyam-teleservices-wins-airwaves-in-8-circles-for-rs-3639-crore/articleshow/18920517.cms

Put the internet to work for you. via Personal Recipe 2910127