MTS awaits cheaper spectrum for India expansion

 Sunny Sen        Last Updated: October 23, 2013  | 19:10 IST
MTS awaits cheaper spectrum for India expansion

Sistema Shyam TeleServices (SSTL), which operates under the MTS brand in India, has launched a high-speed wireless broadband service in an attempt to boost its data revenue.

The new 3GPlus service will offer speed as high as 9.8 Mbps. This is higher than the speed on third-generation (3G) networks, which peaks at 7.2 Mbps, but is lower than 4G speed.

"The margins are higher on data. So we want to be a data company," said Dmitry Shukov, CEO of MTS India.

The company has licences to operate in nine of India's 22 telecom service areas. The 3GPlus service is delivered over evolution-data optimised (EVDO) technology. It will be available over MTS dongles and MTS-branded smartphones. The service will be offered at a starting price of Rs 700 for a month, and goes up to Rs 1,498.

The company aims to increase its share of the Indian dongle market by 50 per cent. It currently has 13 per cent of the Indian dongle market by volume. However, if the nine circles where MTS is present are to be taken, it governs anything between 18 to 20 per cent, said Leonid Musatov, Chief Marketing and Sales Officer at MTS India.

CEO Shukov said the company will expand beyond the nine circles if it gets spectrum at a lower rate. When asked what should be the reserve price for spectrum, he answered: "The right price according to me is zero."

So, at what price does MTS want to go for pan-India expansion? "We have done some calculations but are not ready to talk about them," Shukov said. But he is sure he wants spectrum cheaper than what MTS paid in the last auction - Rs 2,013 crore in addition to Rs 1,626 crore it had paid in 2008.

In early October, MTS received a unified telecom licence from the government, which allows it to offer services through both Code Division Multiple Access (CDMA) and Global System for Mobile communications (GSM) technologies. However, it's not interested in providing GSM services.

"What's the point of thinking about 2G when operators are looking at next-generation [services]," Shukov said.

The company also recently received its third carrier, or tranche, of 1.25 Mhz spectrum for all its circles, taking its total spectrum availability to 3.75 Mhz. But it will still not be able to offer long-term evolution (LTE) technology for 4G services, which it intends to do.

"We need four carriers to do LTE in these circles, but we don't have contiguous spectrum," Shukov said. He, however, remains committed to achieving MTS India's break-even by the end of 2014. Shukov is also waiting for clarity on the Indian government's merger and acquisition guidelines for the telecom sector.

Is MTS looking to make an acquisition? "We are open for discussion [with other operators]," Shukov said.

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