Bloomberg News

Sistema Loses India Appeal on Restoring Wireless Licenses

February 14, 2013

India’s top court rejected an appeal by AFK Sistema to restore its wireless licenses in the country, potentially forcing the Russian company to take part in a new auction of frequencies for mobile-phone services.

A three-judge Supreme Court panel headed by Chief Justice Altamas Kabir turned down so-called curative petitions sought by the Russian company’s Indian phone-operator unit, Sistema Shyam Teleservices Ltd., as well as by local competitors Videocon Industries Ltd., Tata Teleservices Maharashtra Ltd. and Idea Cellular Ltd., the court said on its website today.

Any decision on how Sistema Shyam Teleservices will proceed will be “up to the shareholders,” the unit said in an e-mailed statement. Julia Belous, a spokeswoman for Moscow-based Sistema, declined to comment on whether the investment company owned by Russian billionaire Vladimir Evtushenkov will take part in the new tender of bandwidth.

The Supreme Court canceled 122 wireless licenses a year ago and ordered a redistribution of the frequencies via auctions, citing corruption during spectrum distribution previously. Sistema Shyam appealed the ruling, saying it uses code division multiple access, or CDMA, frequencies, for which there were no other bidders in the initial tender 2008.

Sistema paid about $300 million for use of CDMA spectrum in 21 regions of India, according to the company. Those frequencies are being offered at a minimum $1.22 billion in the auction being held in March, Moscow-based Vedomosti newspaper reported Feb. 1, citing terms of the tender.

Vikash Singh, a lawyer for Sistema Shyam, told the Supreme Court in a related case on Feb. 11 that his company is maintaining its operations in India and taking part in a separate set of frequency auctions this month.

To contact the reporters on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net; Pratap Patnaik in New Delhi at ppatnaik2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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