Sistema Shyam trims Q3 net loss to $89.9M

Indian operator benefits from favorable currency conditions to reduce its net loss by almost US$100 million from the same quarter last year, but its future depends on whether the court reinstates its revoked 2G licenses.

Indian operator Sistema Shyam Teleservices (SSTL) has reported a smaller net loss in its third quarter due to favorable currency exchange rates. It also remains open to bidding fror CDMA airwaves if the reserve price is lowered.

According to its financial statement released Monday, the operator posted a net loss of INR 4.95 billion (US$89.9 million) in the quarter ended Sep. 30, which was lower than the INR 10.09 billion (US$183.3 million) it lost in the same quarter last year.

"The net income benefited due to improvement in OIBDA (operating income before depreciation and amortization) and also due to favorable movement in exchange rate resulting in recording of forex gains as the rupee strengthened against the dollar at the end of the quarter," SSTL CFO Sergey Savchenko said in a separate report by the Economic Times Monday.

Sistema Shyam, which is the joint venture between Russian conglomerate Sistema and India's Shyam Group, added it was open to the idea of bidding for the 800 megahertz (MHz) spectrum if the government lowers its reserve price.

This option, however, will only be explored if the local court turns down its application to restore its revoked 2G licenses. The Economic Times said company petitioned the court to view its CDMA licenses as different from the GSM airwaves, which were revoked by the Supreme Court back in February, and reinstate them. It had 21 of its 22 licenses cancelled because of the Supreme Court ruling.

STTL's president and CEO Vsevolod Rozanov said his company did not have an alternative plan once its 2G permits expire on Jan. 18, 2013, emphasizing that the first priority was the outcome of its petition.

India's CDMA auction plans were hit after Tata Teleservices and Videocon pulled out of bidding two weeks ago, compelling the government to scrap the auction and its future plans to generate revenue from the sale left in limbo.

On the possibility of acquisitions in India, Rozanov said merger and acquisition activities are not top concerns currently. "We have to see how we can continue in India in any way. I cannot see any deals with any company until we have clarity on our own fortunes," he was quoted as saying in another Economic Times report.

His comment follows reports that parent company Sistema was reportedly close to buying a controlling stake in Indian telco Aircel for around US$3 billion earlier this year .