Russian government to make its $600 million investment in the MTS

Sistema Shyam Teleservices, the Indian arm of Russia's Sistema, which promotes the MTS brand, expects the Russian government to make its $600 million investment in the company by October, a top official said on Wednesday.The Russian government will get a 20 per cent stake in Sistema Shyam, which holds telecoms licences for the whole of India, as a result of the investment, Chief Executive Vsevolod Rozanov told reporters.

"Our immediate funding requirements will be taken care of with this investment," Rozanov said. Sistema owns 73.71 per cent of the Indian firm, while India's Shyam Group owns the remainder in Sistema Shyam Teleservices. After the issue of shares to the Russian government, Sistema's stake will be diluted to 54 per cent.Russian Prime Minister Vladimir Putin had in March this year pledged state financial aid for Sistema Shyam.Rozanov said Sistema Shyam would turn EBITDA positive in 2013, though mobile call tariffs were expected to fall further.The entry of new players has crowded India's telecoms space and made it fiercely competitive, leading to dramatic fall in mobile phone tariffs and hit mobile operators' profitability.Recently Sistema Shyam had said it would invest around $1 billion in its India operations over the next one year.