Sistema says its stand on spectrum auction after SC hears plea
New Delhi: Russia's Sistema Thursday said it will decide on participation in the upcoming spectrum auction after Supreme Court hears its petition seeking exemption from the verdict that cancelled 122 telecom licences, including 21 belonging to Sistema Shyam.
"Auction prices announced by the regulator are unjustifiably high and no decision on auction participation will be taken until our case is heard in our Curative Petition to the Supreme Court," Sistema's President and Chief Executive Officer Mikhail Shamolin said in a statement.
He said in the second half of 2012, Sistema's focus will also be on resolving the situation around its Indian telecom operations, SSTL which provides services under brand name of MTS India.
Sistema Shyam TeleServices Ltd (SSTL) is a venture, involving equity participation by Sistema Joint Stock Financial Corporation of Russia, the Russian Federation and the Shyam Group of India. Sistema JSFC is the majority shareholder in SSTL.
The Supreme Court had in February this year held that the process of allocating 122 2G licences, including 21 to SSTL, was 'arbitrary' and 'unconstitutional' and had cancelled all the mobile permits.
The Russian firm had served a legal notice under Bilateral Investment Promotion and Protection Agreement (BIPA) in February to the Government of India.
In its notice, Sistema had said that in case the dispute (regarding 2G issue) is not settled amicably through conciliation by August 28, 2012, it reserves the right to commence proceedings against India on the basis of any applicable inter-governmental investment treaty.
Sistema, which holds around 56.68 percent stake in SSTL, Thursday reported a net loss of USD 161.9 million for the second quarter ended June 30, 2012. The company had net income of USD 332 million for the same period a year ago.
During the reported quarter, it posted an increase of 22.8 percent in net income (without one-offs) at USD 407.8 million from USD 332 million for the corresponding period in 2011.
The consolidated revenues of Sistema stood at USD 8.1 billion during the reported quarter, down by 6.3 percent, compared to USD 8.6 billion it reported a year ago.