Sistema wins eight telecoms zones in Indian airwave auction

11 March 2013 | Kavit Majithia

Sistema Shyam TeleServices, the Indian mobile phone unit of Sistema, has won the airwaves in the eight telecoms zones in India following a successful bid of $670 million.

The spectrum auctions and stake sales in state-run companies are being used to reduce the country’s deficit to within 5.2% of its GDP this fiscal year, and 4.8% for the next fiscal year, starting in April.

Airwave sales have, however, proved difficult, with carriers facing heavy debt loads, and most have not taken part in the bidding process. There is also an argument from most carriers that the base price set by the government is too high.

In the country’s recent November auction, the government raised less than a quarter of its $7.4 billion target, and had set a target of $7.9 billion to sell at today’s auction.

Due to a lack of interest and participants, the government has already had to scrap the sale of two frequency bands for GSM, but is expected to cut the price of unsold frequency airwaves at the next auction.

Sistema’s Indian subsidiary, which had permits revoked in 21 areas following the 2008 licence scandal, won the airwaves at a minimum price, after no companies bid for the band in November.

The company operates CDMA technology, and has said it would cease its operations in 10 zones in the country to only bid in select areas.

It has also confirmed it will shut down its operations in three key zones, including Mumbai, and has not bid there in this auction.