RPT-UPDATE 1-INTERVIEW-Russia Sistema to build pan-India telecom

(Repeats story from Tuesday)

(Adds quote in ninth paragraph on cost estimates)

By Anastasia Teterevleva

MOSCOW, Dec 18 (Reuters) - Russia's Sistema (SSAq.L) plans to create a pan-Indian telecoms operator as it targets the world's fastest-growing mobile market, and may expand into Africa, Sistema President Alexander Goncharuk said.

"We want to build a pan-Indian operator that would be ranked among the market's leaders," Goncharuk told Reuters in an interview. "We have ambition and resources, as we are acting together with a local partner which invests in it pro rata."

In September, Sistema bought 10 percent in Indian telecoms operator Shyam Telelink Ltd and signed an agreement in October to buy a further 41 percent. It also has a call option for another 23 percent.

"We will raise (our stake) to 51 percent as soon as we can, I think before the end of the year," Goncharuk said. The overall purchase price of the 51-percent stake will be $58.1 million, of which Sistema has already paid $11.4 million for the 10 percent.

Goncharuk said Shyam Telelink, which currently provides CDMA cellular services in India's western Rajasthan state, had placed bids for licences to operate in 21 of 28 India's states.

Shyam, which also has a GSM licence in Rajasthan and owns local Internet provider Shyam Internet, is among India's smallest in terms of subscribers but represents an entry ticket into a vast market. "This company is a base on which we will develop the operator together with the Indian partners. The main question mark now is what decision will the authorities make," said Goncharuk.

Goncharuk earlier said that Sistema plans to invest up to $1 billion on expansion in India, including $500 million to buy communication licences and $500 million on rolling out networks.

"Our experts estimate it may cost between $4 billion and $7 billion to create a pan-Indian operator," Goncharuk said.

There are about 217 million mobile users in India and service providers have been signing up more than eight million new subscribers each month on the back of a booming economy, low call tariffs and falling handset prices.

The potential for growth is huge as only about a fifth of India's more than 1.1 billion people have access to a mobile phone, while Russia's mobile market is close to saturation.

"India, in my opinion, offers just fantastic rates of growth and development," Goncharuk said. "We have already trained on the domestic market, so now it is time to compete at international level."

OTHER AREAS

"We are opening a representative office in India because we are confident that we will not only enter India's mobile service market," he said, referring to Sistema's diversified portfolio.

Sistema, majority owned by billionaire Vladimir Yevtushenkov, is the country's leading services conglomerate with a market capitalisation of around $15 billion. Its business portfolio includes telecoms, real estate, oil, retail, banking, healthcare and media assets which generated $5.9 billion in sales in the first half of this year.

"I am sure that our developer Sistema-Hals (HALSq.L) will operate there, because our experience of bridge, road and tunnel construction is definitely wanted there," said Goncharuk.

"This is in line with our common strategy: if we develop any business outside Moscow, it is joined by other units," he said, adding that next year would be the right time to move.

Goncharuk said Sistema was studying possibilities to enter African markets, but declined to name the countries.

"We are deciding where to start. It will be definitely to the north of South Africa. In central Africa, there are several countries with quite a large population we are looking at," he said.

He also said Sistema would first push telecoms to the market. "This is our strongest sector, the most developed and organised. The others will catch up."

Sistema's main asset, Russia's top mobile phone firm Mobile TeleSystems (MTS) (MBT.N), services around 80 million clients in Russia, Armenia, Belarus, Ukraine, Uzbekistan and Turkmenistan.

(Reporting by Anastasia Teterevleva; writing by Maria Kiselyova; Editing by David Cowell, Paul Bolding)

((maria.kiselyova@reuters.com; +7495 775 1242)) Keywords: SISTEMA INDIA/

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