Sistema, one of Russia's largest listed companies with annual revenues of $19 billion, will soon float a public issue for its Indian telecom services venture after Moscow concludes its funds infusion programme of around $675 million.
"We are ready for a public issue. In principle, this has been approved. But there are some procedural issues. We are all hoping it concludes it soon," said Vsevolod Rozanov, president and chief executive of Sistema Shyam TeleServices, their India joint venture.
"The Russian government will also be investing. But the guidelines of the Indian markets regulator want us to freeze the promoter-investment before the public issue. I think this could take around three-four months," Rozanov told IANS in an interview.
The top company executive said both the Russian investment and the public issue will be made by way of issuing fresh equity shares. This means the money, upwards of $1 billion, will accrue to the company for its future plans.
The Russian company has already invested over $1.5 billion in India.
Sistema -- which offers mobile voice and data services in India under the MTS brand -- currently holds 73.71 percent share in the Indian venture, 23.79 percent is held by the Shyam Group and the remaining 2.5 percent is with the public.
During Prime Minister Vadimir Putin's visit here in March this year, Russian officials had told IANS that their government had approved a state investment to the tune of $676 million into Sistema Shyam TeleServices.
"We are ready to contribute funds in your joint activity," Putin himself had said during an interactive session with Indian business leaders during the visit, when queried about his government's proposed investment in Sistema's Indian venture.
Incidentally, the interaction was by way of a live web cast organised from Sistema's office in Gurgaon, on the outskirts of Delhi, with a live audience in cities including the national capital, Mumbai, Chennai and Kolkata.
India's Foreign Investment Promotion Board (FIPB) has already approved the investment under the unified access service norm, which allows telecom companies to offer fixed, mobile and data services all under one licence.
Speaking about the future plans of the company, Rozanov said despite being late entrants in India, there were already some six million subscribers in the country in 12 out of 22 circles in which the company was operating.
"The target of 10 million subscribers by the yearend is very much in sight."
Rozanov said the decision not to participate in the auction of broadband airwaves in India was taken because the technology they have opted for was already delivering very high speeds, which will accelerate further by migrating to next generation technology.
"We launched our high-speed mobile broadband service under the Mblaze brand only in November 2009 but we already have more than 150,000 customers. Our network speed and quality also helped us to successfully launch MTS TV in April," he said.
"What I can also say is our EVDO technology, which is on the CDMA platform, is at par with 3G services under the GSM platform, which are yet to be rolled out by private telecom operators in India. So we have no cause for worry."