Airtel, Hughes India Merge VSAT Business, Command 63% Market Share

Bharti Airtel has merged its satellite services with that of Hughes India, the country’s largest VSAT service provider. With this merger the joint entity will be commanding a market share of 63% in India’s VSAT services business.

As per the contract Hughes will have a majority stake, we understood it would be around 67%, and Airtel to own the rest.

The combined entity will benefit from enhanced scale, improved operational efficiencies and wider market reach, a company statement claimed. Also, the combined entity will be well positioned to leverage the demand for secure connectivity in a rapidly growing digital economy, it added.

Hughes Communications is India’s largest VSAT service provider with around 36% market share and offers satellite-led broadband services to telcos and other enterprises. Airtel’s VSAT business is also doing good and the firm commands close to 27% market share.

The merged entity, thus, will now have 63% market share and pocket the major chunk of customers in the enterprise space.

In terms of revenue perspective, Hughes Communication has made approximately Rs 350 crore by the end of FY2018-19 and Airtel VSAT has done around Rs 150 crore.

The joint entity should comfortable be targeting more than Rs 700 crore for the current fiscal keeping the business prospects of VSAT led services at a time when telcos are deploying such services to connect the most difficult and inaccessible regions of the country that are difficult to connect through terrestrial modes.

The current management of Hughes Communication will lead the joint entity and will continue to serve existing Hughes and Airtel customers.

“We are very excited about the synergies that this partnership will bring to the Indian ecosystem. These are exciting times for satellite broadband service providers as VSAT becomes more mainstream, driven by growing demand from both, enterprise and government segments,” said Partho Banerjee, President and Managing Director, Hughes Communications India.

Ajay Chitkara, Director and CEO, Airtel Business said: “We are pleased to combine our VSAT operations with Hughes to serve the connectivity needs of Digital India. The partnership will bring amazing synergies to the forefront and combine the proven capabilities of both the companies. Customers can look forward to highly secure and reliable connectivity solutions across the length and breadth of India.”

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