The Tata Groups’ loss making telecom business, Tata Teleservices, finally found a graceful way to depart from the telecom business as the company is being acquired by Bharti Airtel – India’s largest telecom firm. Tata Group’s telecom arms – both Tata Tele (TTSL) and Tata Teleservices Maharashrta (TTML) will now be merged with Bharti airtel.
TTSL operates in 19 circles and TTML operates in just two circles – Mumbai and Maharashtra and together, have more than 40 million customers
The acquisition will be on a cash-free debt-free basis. Means, Bharti Airtel will not take care of TTSL’s existing debts – a whooping Rs 30,000 crore, and Tata’s themselves have to settle it.
“This is a significant development towards further consolidation in the Indian mobile industry and reinforces our commitment to lead India’s digital revolution by offering world-class and affordable telecom services through a robust technology and solid spectrum portfolio. On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position in several key circles. The customers of Tata will be able to enjoy India’s widest and fastest voice & data network, and bouquet of Airtel’s best-in-class products and services,” said Sunil Bharti Mittal, Chairman, Bharti Airtel.
This acquisition also means Bharti Airtel would now get to possess close to 180 MHz of spectrum owned by Tata tele in 3 telecom bands- 850, 1800 and 2100 Mhz. This would help Airtel in bolstering its air-wave strength as well as narrow the gap between the proposed Vodafone-Idea merger in terms of subscriber as well as revenue market share.
“The acquisition of additional spectrum made an attractive business proposition. It will further strengthen our already solid portfolio and create substantial long term value for our shareholders given the significant synergies,” Mittal added further.
At present Airtel has little over 280 million subscribers whereas the Vodafone-Idea combined entity would have more than 400 million subscribers.
Airtel is set to loose its numero-uno position in the country’s telecom space that it has been holding for more than one and half decade with the Vodafone-Idea merger. Merging with Tata Tele, Airtel will have more than 320 million customers.
N Chandrasekaran, Chairman, Tata Sons, said, “We believe today’s agreement is the best and most optimal solution for the Tata Group and its stakeholders. Finding the right home for our longstanding customers and our employees has been the priority for us. We have evaluated multiple options and are pleased to have this agreement with Bharti.”
Besides Tata Tele, the Tata’s also have other business entities in the media and communication space – its enterprise business, Tata Communications and Tata Sky. Though there has been no decision whether these units are going to be merged with Airtel or not, the companies said talks are going on and a decision will be taken at a later stage.