Affordable spectrum needed to boost investment: Russian conglomerate Sistema

Russian conglomerate Sistema has been re-establishing telecom operations in India after the Supreme Court cancelled 21 of its 22 telecom licences through its action against 122 licences in February 2012. The company, which runs telecom operations under the MTS brand and is the only major operator working on CDMA technology, wants the government to boost spectrum availability for CDMA players at affordable cost to encourage investment.

As Russian President Vladimir Putin visits India, TOI speaks to Mikhail Shamolin, president and CEO of the $40 billion Sistema JSFC, to see how he looks at the Indian telecom market and what are the group's plans for other sectors like pharmaceuticals, oil and gas and smart city project:


How does Sistema view India for new investments considering that the conglomerate is already a majority investor in Sistema Shyam TeleServices Ltd ( SSTL)?

India with its huge population, the emerging middle class and recovering economy is one of the most promising markets globally and we view our presence in this market as strategic.



Is it correct to say that CDMA is not a growing technology when compared to the GSM band?

There is no denying the fact that CDMA globally faces ecosystem challenges including handset choices. However, when it comes to customer experience on data, the same technology offers huge inherent advantages over other competing mobile technologies. Long-term roadmap for both GSM and CDMA leads to LTE ( 4G). In this context, SSTL is looking ahead to build a long-term, sustainable business provided issues relating to 800 Mhz spectrum pricing and its subsequent auctions are addressed by the Indian government.



Do you think that CDMA players need more frequency to grow operations in a growing market like India and denial of it is discriminatory to your operation and investment?

Spectrum is the oxygen for any telecom operator. To build a long-term sustainable business, SSTL needs contiguous blocks of spectrum in the 800 Mhz band. While it is heartening to note that the new government is committed to 'Digital India', for this focus to transform into reality, data-centric telecom operators like SSTL would need to play a special role. It is thus imperative that contiguous blocks of spectrum are auctioned at a price, which is in line with the current ecosystem realities of CDMA operators. There are some reports which suggest that there is a thought of pricing 800 Mhz spectrum at Rs 3,646 crore per MHz. This is way out of line and does not merit a strong business case for buying additional spectrum.

Can you provide a perspective in areas beyond telecom where Sistema is looking to be a part of the India growth story including the Smart City project?

Sistema has expertise in Smart Cities. We've built nine such projects to date including some of the largest projects of their kind such as the one for Moscow City and Sochi.

In the past, Sistema has talked about partnerships with Indian Companies in diverse areas such as pharmaceuticals, oil and gas and also healthcare?

Partnerships in pharma and healthcare industries are still in our focus zone. We've developed strong relationships with a wide spectrum of Indian businesses and as our talks progress, we hope some relationships will turn into partnerships.