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Indian operator pulls out of 10 circles prior to spectrum auction

MTS India will cease operations in 10 of India’s telecom circles. The operator had 21 of its 22 licences annulled last year by the country’s Supreme Court, and its appeal against this decision has proven unsuccessful.

Although the operator is eliminating its presence in almost half of its circles, this in fact represents only 15% of its Indian customers, and around 10% of its 3000-strong workforce. MTS is shutting down its networks in Assam, Andhra Pradesh, Bihar, Himachal Pradesh, Haryana, Jammu & Kashmir, Madhya Pradesh, North-East, Orissa and Punjab.

MTS India aims to maintain its presence in its remaining 11 telecom circles by buying new spectrum licences at auction in March – due in no small part to the Indian government’s decision to slash the price of 800MHz CDMA spectrum after it was deemed too expensive by bidders in the previous auction.

The price cut has provided the operator’s owner – Russian firm Sistema – with a more cost effective means of maintaining its Indian footprint. The recent spectrum price cut prompted it to abandon plans to acquire local operator Aircel.

Vsevolod Rozanov, CEO of Sistema Shyam TeleServices (SSTL), stated:  “I would like to confirm our intention to participate in the upcoming spectrum auction in March 2013. We are in the process of drawing an optimal strategy for the auction based on several factors including spectrum pricing, levels of competition etc.”

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