HELSINKI, Finland-The Moscow-based Sistema Joint Stock Financial Corporation (Sistema) has approached several leading Finnish telecom companies and venture capital houses in search of Western technical expertise and funds to conduct a mixed US$1 billion mobile technology investment in India.
The bulk of Sistema’s proposed investment in India would concentrate on a series of equity-linked investments and focused joint ventures in second-generation (2G) and third-generation (3G) network operators and license holders operating in India.
Sistema has drafted a five-year strategic plan to invest in mobile and fixed telecom companies and Internet technology companies in India. The group’s current investment portfolio includes telecommunications, insurance and electronics. All the company’s investments are inside Russia.
CapMan, Aboa Venture and Nordea Capital are listed among the Finnish venture houses contacted by Sistema. The company is also known to have approached the Helsinki-based Elisa Communications and its mobile cell-phone operator division Radiolinja.
Given that Finnish telecom and investment companies are reducing risk exposure to Russia, it appears unlikely that a major Finnish telecom or financial group will join the privately owned Sistema’s project in India.
Sistema has strong political connections to Russian President Vladimir Putin’s government, underlined by the fact that Ilya Klebanov, Russia’s industry minister, has been assigned the task of assisting the company with finding technical and financial backers in Finland.
Klebanov has also been tasked to collaborate with government agencies in India to locate suitable joint venture candidates.
“We are looking at total investments over two years of US$1 billion. I have already completed talks with India’s Foreign Minister, Yashwant Sinha, and these talks were very constructive. This investment would be the single biggest capital venture between Russia and India,” said Klebanov.
Klebanov said that while Finnish investment and expertise would be a “useful plus to have,” Sistema has the financial resources to develop projects in India “by itself” in collaboration with Indian partners.
Major international mobile companies, such as the Hong Kong cellular technology group Hutchison Whampoa and Singapore Telecommunications, are already active in India.
In Russia, Sistema holds a controlling interest in the Moscow City Telephone Network and a 22-percent stake in Mobile Telesystems (MTS), one of Russia’s leading mobile operators.
