Bharti Airtel to acquire Tata Tele for nothing
Signalling further consolidation in the telecom industry, Bharti Airtel and the Tatas have reached an agreement to merge the consumer mobile business (CMB) of Tata Teleservices (TTSL) and Tata Teleservices Maharashtra (TTML) into Bharti.
As part of the agreement, Bharti Airtel will absorb Tata CMB’s operations across the country in nineteen circles (17 under TTSL and 2 under TTML) that will see over 40 million customers of Tata Teleservices coming under Bharti Airtel.
These circles represent bulk of India’s population and customer base.
The merger is being done on a debt-free cashfree basis, except for Bharti Airtel assuming a small portion of the unpaid spectrum liability of Tata’s towards the department of telecommunication (DoT), which is to be paid on deferred basis.
The proposed merger will include transfer of all the customers and assets of Tata CMB to Bharti Airtel, further augmenting Bharti Airtel’s overall customer base and network.
The entry of Jio, the telecommunication arm of Mukesh Ambani-led RIL had triggered intense price war among incumbent operators at the cost of margins.
“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,” said Sunil Bharti Mittal, chairman, Bharti Airtel.
In a joint statement issued on Thursday, Tata and Bharti Airtel said they would work together to further explore other mutual areas of cooperation that will be value accretive for both the goups.
According to them, Airtel will ensure quality services to Tata CMB’s customers, while offering them the added benefits of its product portfolio, mobile banking, VAS and roaming facilities.