Sistema Shyam Teleservices is the 10th player to enter the crowded Mumbai telecom services market. It has announced promotional tariff rate of half a paise per second. Priyal Guliani reports.
MTS, a joint venture between Russia-based Sistema and Shyam Telecom has set its foot in the financial capital with an investment of USD 40 million. After MTNL, even MTS is offering half a paisa per second for local calls and STD calls to MTS subscribers. The promotional offer is only for a few weeks. MTS, which has 22 circles, plans to make an investment of USD 1billion. It will get USD 676 million via equity sale to Russian Federation and USD 400 million via debt.
Says Vsevolod Rozanov, President and CEO, SSTL, “At this stage we are looking at plain vanilla loan from market places in India. We may be looking at approaching the capital market. We will continue our negotiations with major Indian banks.”
Mumbai-based Loop Mobile also reacted with a 10 paise per minute plan for its prepaid subscribers. And while the new entrant says that its business model is sustainable, new rollout plans of the industry may get curtailed.
“With this stiff competition, capex funds that can be deducted for rolling network in rural areas will be declining,” Rozanov says. “We need to have different business model to stimulate the dead need.”
For now the pain is in the existing markets and that will remain the focus area for some time to come.
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