Sistema Shyam Telecom limited (SSTl), which operates under MTS brand in India, will break even in end of 2014 or first half of 2015. SSTl President and Chief Executive Officer Vsevolod Rozanov said that the company has gone through some tough times over the last twelve months, but the doubts and the ambiguity are now over.
“Despite the challenges during the last year we were able to grow our revenues by 31 per cent and improve on our operating income before depreciation and amortisation (OIBDA) margins by 64 percentage points, which reflects the strong fundamentals of MTS’ business in the country. As seen in our results, we continued to lower OIBDA loss, and in the last quarter achieved breakeven in our first circle - West Bengal. Most importantly the results demonstrate the strength of our data franchise which in 2012 brought almost a third of all our revenues,” Rozanov added.
last week in Moscow, SSTl had announced a net loss of `779 crore for the quarter ended December 2012, compared with a net loss of `1,197 crore in the year-ago period. The company recently won spectrum in 8 circlers and now operates in 9 circles.
“Our focus will be on developing a stronger data franchise, restarting the smartphone business and harvesting voice segment. We will now follow tailor made business strategies for each of the nine circles to bring the OIBDA break even at the earliest and also create assets which can be transferred easily to new technologies. We aim to achieve this with strict cost control,” he added further.
He said that the company will also provide lTE or 4G services in the near future. MTS, which has a subscriber base of 10.58 million and 1.18 million data users, will focus on circles with greatest data potential and lTE opportunity in the country. It already has 60 per cent coverage of potential data market in Indian market.
The company said that 850 MHz spectrum provides an opportunity for SSTl to migrate to lTE and provide users with a better experience than 3G.
“Playing to our strengths we selected and secured the highest data potential circles in India whilst at the same time maintained majority of our subscribers and revenue. 8 out of 9 nine circles have technological neutrality and all circles now have 3 carrier slots substantially improving our network,” Rozanov informed.
It will invest around $200 million (about `1,093 crore) to roll out 4G services. However, it doesn’t have any plans to launch the 4G services this year. “SSTl now has an enhanced network, which will deliver excellent quality and a clear roadmap to lTE (4G). Our network is easily upgradable with likely expenditure being $200 million spread over several years,” he further added.
Till now SSTl, which entered India in 2008, has invested around $3.6 billion (over `19,000 crore at exchange rate of `55) in the India.