Russia's Sistema buys 10 pc stake in Shyam Telelink

NEW DELHI: Sistema JSFC, Russia's largest private consumer services firm, on Wednesday bought 10 per cent stake in telecom operator Shyam Telelink for $11.4 million, marking the entry of a Russian company in India's rapidly growing telecom space.

Sistema, which is listed on the London Stock Exchange and controls Russia's largest mobile operator, will eventually acquire 51 per cent stake in Shyam Telelink, for which it will soon approach Foreign Investment Promotion Board (FIPB).

Shyam Telelink currently provides telecom services only in Rajasthan and has applied for nation-wide Unified Access Service (UAS) licenses for the other 21 circles. It will use the proceeds from stake sale to part finance its pan-India expansion into mobile services.

The Shyam Telecom group company offers both wireless as well as wireline services and claims to have a subscriber base of over 270,000 with services across 125 cities and towns, chairman of Shyam Group Rajiv Mehrotra said.

Shyam Telecom shares on the Bombay Stock Exchange surged nearly 20 per cent on Wednesday to settle at Rs 96.50.

Sistema had earlier evinced interest in acquiring Hong Kong-based Hutchison Telecom's stake in Hutchison-Essar Ltd, which was eventually bought by British firm Vodafone for about $10.9 billion in February this year.

Shyam Telelink offers wireline and wireless service in Rajasthan under the brand name "Rainbow". The company has laid 4,000 km long optical fibre network across the state for providing high bandwidth and self-protected backbone.