Sistema announced the closure of services in 10 Indian provinces [i.e. Assam, Andhra Pradesh, Bihar, Himachal Pradesh, Haryana, Jammu & Kashmir, Madhya Pradesh, North East, Orissa and Punjab] out of 22 where it has operated so far. We see this as positive news as it is in line with the previous management guidance to reduce exposure to India. Sistema also confirmed that it will participate in the new license auction on March 18, without specifying the amount of licenses it will bid for. At the auction Sistema said it will be able to set off US$300m previously paid for the licenses against the new auction price.
Sistema also confirmed that it will participate in the new license auction on March 11, without specifying the amount of licenses it will bid for. Given that Sistema already fully operates in Rajasthan province (1 of the initial 22 licenses), it may bid for a range of 1-11 licenses at the new auction. In the meantime, at the auction Sistema will be able to set off US$300m previously paid for the licenses against the new auction price.
4Q 2012 results expected on 16 April and the management conference call afterwards should reassure investors and be positive for the shares.