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Airtel to Buy the Consumer Mobile Business of Tata Teleservices

 

Bharti Airtel Ltd is acquiring the Tata conglomerate’s consumer mobile business, the two companies said on Thursday, in a deal that gives India’s top wireless player a major subscriber base boost for virtually free, while stemming the bleed for Tata from a loss making venture.

The transaction will be done on a “debt-free cash-free” basis, the companies said in their joint statement, although Bharti Airtel will take over a “small portion” of Tata’s unpaid spectrum liabilities.

Tata Teleservices and its unit Tata Teleservices (Maharashtra) Ltd have more than 40 million subscribers and rank ninth in India’s telecoms market, which had a total of 1.2 billion mobile subscriptions at the end of July.

The Indian telecom sector is in the midst of a wave of consolidation after the entry of Reliance Industries’, Reliance Jio Infocomm venture.

Reliance Jio, backed by India’s richest man Mukesh Ambani, has sparked a price war and cut-throat competition in the space, eroding profits for carriers at a time when they already have high debt levels after costly airwave purchases.

As part of the deal, Tata’s mobile customers in 19 service areas will move to Bharti Airtel along with airwaves that Tata had purchased.

“Tata and Bharti Airtel will work together to further explore other mutual areas of cooperation,” the companies said.

The statement also said Tata is in the initial stages of exploring a combination of its enterprise business with Tata Communications Ltd and its retail fixed-line and broadband business with satellite TV arm Tata Sky.

Tata will retain its stake in tower company Viom, and will take care of the liabilities associated with it, according to the statement.

Goldman Sachs advised Tata on the deal.

© Thomson Reuters 2017

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Written by Anadkat Madhav

I am a software engineer, project manager, and Mobile Application Developer currently living in Rajkot, India. My interests range from technology to entrepreneurship. I am also interested in programming, web development, design, Mobile Application development.

You can also contact me through my website
madhavanadkat.com

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