Russia’s Sistema in dispute with India over telecom licenses

Russia’s Sistema is threatening legal action against the Indian government after a Supreme Court ruling revoked 21 telecom licences from the company’s Indian subsidiary SSTL.

­Earlier this month the authorities decided to recall 122 telecoms licenses issued in a 2008 auction claiming they were sold below market prices.

Sistema is considering a case before the International Arbitration court, if the Indian Government fails to reverse the decision by June when the licenses are due to be cancelled. The company claims Indian authorities have broken the clause in their agreement on providing investment security.

The company says it has invested $3.1 billion in Indian telecom operator MTS India, which serves 15 million customers.

Although the chances India’s Supreme Court will reverse its decision are slim, Sistema hopes to resolve the matter amicably.

“The Supreme Court ruling said that all the licenses should expire on the 2nd of June. But it’s up to the Indian Government to decide, first of all how a new auction should be held and if it’s possible for the government to conduct auction before June 2,” said Mikhail Shamolin, president of the AFK Sistema.

“Also, the government can provide an extension or apply to the court to give an extension. We believe that one of these options will be pursued by the government”, he added.

Sistema’s subsidiary SSTL along with Norwegian telecom operator Telenor plans to continue operations in India. While Bahrain’s Bateco and Etisalt of the United Arab Emirates announced they will quit.