MTS aims to triple customer base by 2013

Sistema owns a 73.7 per cent stake in Sistema Shyam, which promotes MTS; currently the company has 10 million customers

Russian oil-to-telecoms group Sistema's Indian mobile unit,Sistema Shyam Teleservices, which promotes the MTS mobile service brand, expects to triple its customer base and aims to be EBITDA positive by 2013, its chief executive said.

The company sees 30 million customers by 2013 from 10 million currently, Vsevolod Rozanov, chief executive of Sistema Shyam TeleServices said on Tuesday.

IPO plans to be ready in a couple of months

Vsevolod Rozanov also said the firm would finalise in the next couple of months the investment banks that would manage its planned initial public offering (IPO), although the timing of the issue was not yet decided.

"As we have said, we will be ready (for IPO) by the end of this calendar year," Rozanov said, but added the timing of a listing would depend on improvement in regulatory environment and on market conditions.

India is the world's fastest-growing mobile market by customer additions and its 771 million mobile subscribers make it the second-biggest mobile market after China, but carriers operate under wafer-thin margin amid fierce competition in a crowded 15-player market where mobile voice business dominates.

Aims bigger share in India's mobile data market

Sistema Shyam is focusing on gaining a bigger share of India's fledgling but growingmobile data market where there is less competition.

The once-booming telecoms sector has also been hit by a scandal over grant of licences and radio airwaves in 2007/08, which a state auditor said could have cost the government up to $39 billion in revenue. Several telecoms carriers face risk of losing their permits as a probe into the alleged scam is on.

Sistema Shyam is not involved in the licensing scam, but is among companies that have been named by the sector regulator to not have met network rollout requirements. The regulator has recommended to the government to cancel dozens of licences, including 11 held by Sistema Shyam over rollout.

The government this month issued notices Etisalat's Indian mobile venture and Idea Cellular to defend their licences for not meeting the rollout requirements.

“Company didn't get 'show cause' notice from govt”

But Rozanov said they had not received any of the so-called "show cause" notice. He said the company had launched commercial services in 18 of India's 22 zones and will launch operations in the remaining zones in the next two to three months.

Sistema entered India in late 2008 by picking a controlling stake in a small Indian mobile firm, which has been since renamed as Sistema Shyam TeleServices.

Sistema owns a 73.7 per cent stake in Sistema Shyam, while India's Shyam group owns 23.8 per cent and the remainder is held by minority shareholders.

The Russian government in December paid $600 million for a stake of about 17 per cent of Sistema Shyam. Rozanov said he expected the Russian investment deal to be closed in next few weeks, which would dilute Sistema's holding in the company.