[. AMSOST - Association of Minority Shareholders of Sistema Shyam Teleservices Limited] Sistema to rebuild MTS brand, to step up marketing spending

[AMSOST]

Russian conglomerate Sistema will increase marketing spends to rebuild its MTS telecom brand in India, executives said.

KOLKATA: Russian conglomerate Sistema will increase marketing spends to rebuild its MTS telecom brand in India, two executives aware of the matter have said. The executives, who did not want to be named, said Sistema's Indian arm, Sistema Shyam Teleservices, will increase media spends in 2013 "by at least 20% to strengthen performance and customer appeal of the MTS brand across its nine-circle footprint".

The development follows an internal company email, a copy of which was reviewed by ET, in which Sistema's global head of telecom assets, Anton Abugov, has told all Sistema Shyam employees that "the uncertain times are finally over for the company and work needs to be done to replicate the success of brand MTS in Russia and CIS countries in India". Sistema Shyam's spokesman did not respond to ET's emailed query on the size of the brand-building budget. The telecom operator, which offers CDMA services under the MTS brand, was among the worst hit in the February 2012 Supreme Court order in the 2G-spectrum allocation case. Earlier this month, it won permits in eight zones in a government-conducted auction of airwaves.

Abugov has also assured the 2,500 employees of Sistema Shyam that the company will go flat out to return to profitability. "There is a sea of opportunity across all revenue lines — be it voice, data and smart phones — which calls for absolute commitment to optimise all available resources," the email said.

The executives quoted above said the company is likely to implement the "key learnings on the quality and innovation front" that have made MTS the top GSM technology-based mobile services brand in Russia and key CIS markets like Ukraine, Armenia, Belarus and Turkmenistan. They clarified that the international brand-related learnings would be adapted to the company's CDMA operations in India.

Vsevolod Rozanov, president & CEO of Sistema Shyam, said, "Year 2012 was a challenging year for us. But with the uncertainties over, SSTL will concentrate its energies and resources to effectively execute its data-centric, voice-enabled strategy." Rozanov declined to reveal investment numbers.

The decision to commit fresh resources is being viewed by some as the company's plans to start afresh in India. Sistema had said in June last year that it would cease all investments in its voice business in India and focus on data services. The company was then reportedly losing $1.5 million a day in the country.

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Posted By AMSOST to . AMSOST - Association of Minority Shareholders of Sistema Shyam Teleservices Limited at 3/29/2013 09:41:00 AM