The Russian government is buying a 20% stake in Shyam-Sistema telecom joint venture for a little over $680 million (Rs 3,432 crore). The company is issuing additional shares to the Russian government. The deal would value Sistema Shyam Teleservices at $17.160 crore, reports Economic Times.

Shyam-Sistema was among the nine firms that got telecom license last year and offers mobile services under the ‘Rainbow’ brand in Rajasthan. The additional funding will certainly help the company expand its operations in the country.

The deal is part of India's debt settlement scheme with Russia, where the country owes $1 billion. India owes money to Russia for products bought prior to Soviet Union's collapse which is parked in a rupee account with the Reserve Bank of India (RBI). Russian government or companies can utilise this to finance its investments and joint venture (JV) projects in India.

Shyam-Sistema is planning to launch its services in Tamil Nadu, Chennai, Karnataka, West Bengal and Kolkata soon. It has already signed a deal for tower infrastructure with Tata-Quippo combine. Sistema has invested $1 billion in Shyam and plans invest another $1.5 billion in next couple of years. It plans to launch the pan-India services on the CDMA platform. The joint venture aims to have more than 35 million subscribers by 2012.

In another development,  Shyam-Sistema has taken 30,000 sq.ft. sapce on long-term lease at Kolkata’s telecom complex  PS-Srijan Tech Park.

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