Sistema gets FIPB nod to raise stake in Shyam Telelink

Clearing all lines for Sistema JSFC, the Foreign Investment Promotion Board...

Clearing all lines for Sistema JSFC, the Foreign Investment Promotion Board (FIPB) on Friday gave its approval to Russia’s largest private consumer service firm to raise its stake in Shyam Telelink to 74 per cent. Sistema JSFC had bought 10 per cent stake in the Rajasthan-based firm for $ 11.4 million in September this year.

London Stock Exchange listed Sistema plans to acquire 51 per cent stake in the domestic telecom firm in the near future and may ramp up the shareholding to the maximum permissible limit of 74 per cent later. According to sources, Sistema’s proposal would now go to finance minister P Chidmabaram for the final approval.

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 the stake sale to part-finance its pan-India expansion into mobile services.

Shyam Telecom group’s 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. Sistema had earlier evinced interest in acquiring Hong Kong-based Hutchison Telecom’s stake in Hutchison-Essar, 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 a 4,000-km long optical fibre network across the state to provide high bandwidth and self-protected backbone.

Shyam Telelink officials had earlier said the induction of Sistema augurs well for Indo-Russian relationship as this would be the first commercial venture between an Indian telecom service provider and a Russian private sector company.

The relationship would not only give Shyam Telelink an edge to compete in the competitive Indian market but also bring new services and practices to benefit consumers. Sistema is the largest private sector consumer services company in Russia. Founded in 1993, the corporation develops and manages a portfolio of market-leading businesses in selected service-based industries.