Could a merger be on the cards for SSTL?

With the dust settling after the 2G spectrum auctions, the Indian market’s landscape could shift significantly through mergers and acquisitions. The Russian-owned operator Sistema Shyam TeleServices (SSTL) has already registered its interest, having decided against reacquiring the licences that it lost following their cancellation in February.

The firm’s Indian operation, MTS India, retained only one of its 22 licences and has appealed to the Supreme Court in an attempt to retrieve them. The firm’s CEO Vsevolod Rozanov noted that he believes there will be "nothing serious to report” regarding M&A until this issue has been resolved, although there has been speculation that the firm could be in talks with the seventh-place Indian operator, Aircel.

For the third quarter, SSTL’s net losses were INR494 crore (US$112 million), significantly down from last year’s loss of INR1000 crore over the same period. Its revenue also rose over last year’s to INR404 crore.

“The telecom industry continues to suffer due to regulatory actions. Subscriber growth during the quarter also suffered on account of uncertainties in the operating environment and due to the predatory practices adopted by competition,” Rozanov said.

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