Shyam closes in on Rs 5,000 cr infra-sharing deal with RTIL

In what could be the first active infrastructure sharing arrangement in the country, Russian communications major Sistema-controlled Shyam Telecom is learnt to be in advanced talks with Reliance Telecom Infrastructure Ltd (RTIL), Reliance Communications’ hived off tower arm, for a Rs 5,000-crore deal spread over 10 years.

As per the arrangement, Shyam Telecom will offer mobile services by riding on RTIL’s infrastructure—both active and passive—for 10 years. Shyam was recently allotted CDMA start-up spectrum across 12 circles, covering 16 states.

This deal will enable the CDMA operator to launch operations without setting up its own network. The Shyam-RTIL model could be the first of more such deals as new entrants try to save on time taken to set up and roll out networks across the country.

Other new players such as Datacom, Unitech, S Tel and Loop Telecom are also learnt to be exploring such business models, which offers them ready-to-use quality telecom infrastructure, which in turn, enables them to reduce their time-to-market and accelerate their network deployment. Industry experts say that roll-out dates can be advanced by as much as 8 - 12 months if new players adopt this model.

The entry of several new players, which opens the potential for many such infrastructure sharing deals in the coming months may also result in stand-alone tower firms such as RTIL, Indus (a tower JV between Bharti, Vodafone and Idea) and Bharti Infratel justifying their high valuations.

Read more in The Economic Times article.

Russia's Sistema buys 10% stake in Shyam Telelink

In another round of consolidation, the Russians have arrived to participate in the Indian telcom services sector. Russian telecom major Sistema has acquired 10 per cent stake in Shyam Telelink - the basic telecom services provider in the state of Rajasthan. Shyam Telelink is a group firm of Shyam Telecom.

The deal value could not be immediately ascertained. But the Russian major plans to increase the stake to 51 per cent subject to approval from the Foreign Investment and Promotion Board. The long-term plan is to take the stake up to 74 per cent, as is allowed under the FDI policy.

Shyam Telelinks, that provides services under the Rainbow & Citymobile brand names in Rajasthan, has applied for nationwide mobile licenses.

Shyam Telecom eyes acquisitions

Telecom equipment manufacturing company Shyam Telecom is looking for acquisitions in Europe or Asia, including India, as part of company's expansion plans and has earmarked $40-50 million (Rs 160-200 crore) for the purpose.

Shyam Telecom director N Kumbhat said with the acquisition, Shyam would be able to bring down its overall manufacturing cost significantly besides increasing presence in the global market. Currently, the company imports raw materials and manufactures its products, mainly repeaters, in the country.

Telecom operators use repeaters to enhance coverage in larger areas such as malls and basement offices. The electronic device receives weak signals and retransmits them as higher signals. This helps in reducing call drop rates and increases connectivity. Shyam Telecom had exported repeaters worth three million dollars last year.

Read more in The Times of India article.