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Russia to buy MTS India stake for $600m
09 September 2010
The Russian state is to spend $600m on a 20% stake in Sistema Shyam Teleservices, which runs MTS services in India
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The Russian government will purchase nearly a 20% stake in Indian operator Sistema Shyam Teleservices — which operates under the MTS brand — for $600 million. The deal will value the company at $3 billion.
The company, which offers CDMA-based mobile services in India under the same brand that is used by Sistema’s MTS in Russia, is a joint venture telecom firm with India’s Shyam Group and Russia’s Sistema, which holds 74% stake in the group.
Sistema’s stake in the JV will reduce to nearly 54% after the deal, while there will be no changes in the Shyam group’s shareholding. The Russian government will use its money under a rupee-rouble debt agreement between both countries to finance the deal.
SSTL, which has until now invested nearly $1.5 billion since its launch in India, is currently operational in 12 of the 22 licence districts — circles — and will be launching its services in three more by the end of 2010-11. GTB