Sistema Shyam, which sells telecoms services under the MTS brand had license for 22 circles across India. However, the company lost all the licenses barring one, when the Supreme Court quashed 122 2G licenses under the 2G scam in February 2012. Last week only Sistema had announced to shut operations in 10 circles including Assam, Bihar, Himachal Pradesh, Andhra Pradesh, Jammu and Kashmir, Haryana, Madhya Pradesh, Orissa, North East and Punjab.
In today's 2G auction of 800 MHz CDMA airwaves, Sistema bagged license for eight circles including Delhi, Kolkata, Karnataka, Tamil Nadu, Kerala, West Bengal, UP (West) and Gujarat, but the company decided to exit three more circles- Mumbai, Maharashtra and eastern Uttar Pradesh. The Indian arm of Russian conglomerate Sistema has asked customers of these circles to port out to other telecom operator of their choice.
Also read: 2G auction: Sistema Shyam bags 8 circles, avoids Mumbai
Sud says that if the company had not bid in this auction, it would have required to leave the country. On the CDMA spectrum, Sud agreed that the technology did not have as much growth scope like GSM.
Below is the verbatim transcript of the interview
Q: The government has managed to garner Rs 3639 crore from the sale of CDMA spectrum and that too from one single company, not much of an auction considering there was only one company bidding. What do you make of this entire process?
A: If you look at the situation of Shyam Sistema, they were present across the whole country. Now after this round of auctions they have bid in only 8 circles out of the 21 which were up for auctions. Obviously they have paired down their business on the basis of the high reserve price. They must have done their internal calculations to decide what is the minimum they would like to bid in, so that they can continue in their business, they can protect their investments. I don't think it is a very positive situation. It is just that they are making the best of a bad deal.
Q: Are you saying that in essence Sistema was forced to bid at these current prices?
A: If they had not bid this time around also then chances are they would have lost all their licenses for good and then they would have had to pack up and leave the country. If you are between the devil and the deep sea, you are in a way forced to take a decision. So, you do the best you can under the circumstances and I suppose that is what they have done.
Q: Even though Sistema has chosen to bid for CDMA spectrum, many experts, in fact government officials right here on CNBC-TV18 have said that it is an outdated technology, do you think that in many ways it is the end of the road for CDMA technology now?
A: As of now the prospects for CDMA are not the same as for GSM, whether it is infrastructure, whether it is handsets, the CDMA technology has fewer vendors and therefore the prices are higher. In terms of the eco-system definitely the CDMA eco-system is not as good as GSM. However to say that this is the end of the line for CDMA, I think it is a little early in the days to say that.
Q The government is now next going to conduct another round of auction for GSM spectrum. Would any of your members like Reliance Communication and Tata Telecom be interested in 1800 Mhz spectrum then?
A: 1800 Mhz is going to happen but at what price? At the end of the day there is a price for every product. There will definitely be a price for 1800 Mhz, there will definitely be a market for 900 Mhz, provided the price is right. If the government chooses to put up the 1800 Mhz at the same prices that it decided (in November); this time around chances are that the outcome will also be the same, then there won't be any bidders.
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