Mo­bile Busi­ness Porta­bil­ity: Air­tel Num­ber for Tata Tele

Tata Group to sell wire­less busi­ness to Bharti Air­tel on a cash-free, debt-free ba­sis

The Economic Times - - Front Page - Our Bu­reaus

Mum­bai | New Delhi: The Tata Group has agreed to sell its mo­bile busi­ness to Bharti Air­tel for free, end­ing the salt-to-soft­ware con­glom­er­ate’s long-stand­ing at­tempts to rid it­self of this loss­mak­ing ven­ture while bolstering the mar­ket share and 4G air­waves ca­pac­ity of the Su­nil Mit­tal-led com­pany.

The deal, which has been done on a ‘debt-free, cash-free ba­sis’ will in­ten­sify the con­sol­i­da­tion process un­der­way in the tele­com in­dus­try, which has now come to be dom­i­nated by three play­ers — the Idea-Voda­fone com­bine, Bharti Air­tel and Re­liance Jio. Once the Idea-Voda­fone merger is closed, Air­tel will slip to the No. 2 po­si­tion in the Indian mar­ket, Call­ing Card Bharti Air­tel Tata Tele (In Mil­lion)

Com­bined: (In %)

Rev­enue Profit/Loss

Idea & Voda


Sub­scribers Rev.Mkt Share (In Cr) 4G-ready spec­trum in 850 MHz, 1800 MHz & 2100 MHz outgo, no li­a­bil­ity of Tata Tele’s 31,000-cr debt part of spec­trum li­a­bil­ity and the ac­qui­si­tion of Tata Te­le­ser­vices’ wire­less op­er­a­tions will help it to nar­row the gap with the merged en­tity. The news about the deal was first re­ported on

of Tata Tele’s loss-mak­ing wire­less biz

No cash Only small Sep­a­rates it

from stronger fixed­line and broad­band, and en­ter­prise biz­nomic­ on Thurs­day af­ter­noon, ahead of the for­mal an­nounce­ment.

The ex­pec­ta­tion had been for in­fla­tion of 3.5% and in­dus­trial growth of around 2.5%. The num­bers will buoy the gov­ern­ment, which has been at the re­ceiv­ing end of a spate of crit­i­cism for its eco­nomic man­age­ment after growth fell to 5.7% in the April-June pe­riod, trig­ger­ing a raft of down­grades in FY18 growth es­ti­mates by mul­ti­lat­eral in­sti­tu­tions, the Re­serve Bank of In­dia and bro­ker­ages. The gov­ern­ment had been con­sid­er­ing a stim­u­lus pro­gramme to help re­vive growth, some­thing the Eco­nomic Ad­vi­sory Coun­cil to the prime min­is­ter had weighed against on Wed­nes­day.

Ex­perts wel­comed the signs of re­cov­ery but want to watch the data for a few months be­fore call­ing a turn­around.

“These are early signs that will dis­pel the gloom that had set in. This seems to sig­nal a turn­around in eco­nomic ac­tiv­ity,” said Sau­gata Bhat­tacharya, chief econ­o­mist at Axis Bank, while point­ing out that pri­mary goods and elec­tric­ity had con­trib­uted in a big way to the re­cov­ery. HDFC Bank se­nior econ­o­mist Tushar Arora said, “Man­u­fac­tur­ing growth is bet­ter than ex­pected but it does not mean that we will change our fore­cast be­cause it was prompted by a favourable base in min­ing and elec­tric­ity and GST re­stock­ing.”

Ad­vance in­di­ca­tors such as car sales and the pur­chas­ing man­agers’ indices for Septem­ber have also been buoy­ant, sug­gest­ing some strength ahead of the fes­ti­val sea­son.

“Three suc­ces­sive im­pres­sive growth rates would in­di­cate a real re­cov­ery. Or else, it would be more a case of the re­stock­ing im­pact of the GST (goods and ser­vices tax),” said Madan Sab­navis, chief econ­o­mist at CARE Rat­ings.

The gov­ern­ment has main­tained that the econ­omy bot­tomed out in the AprilJune quar­ter and that it will re­vive, a view en­dorsed by RBI that last week pared gross value added (GVA) growth to 6.7% from 7.3% es­ti­mated ear­lier. It said GVA growth will rise to 7.7% in the March quar­ter. The IMF had on Oc­to­ber 10 cut In­dia’s growth fore­cast for FY18 to 6.7% from 7.2% es­ti­mated ear­lier, at­tribut­ing the slow­down to GST, im­ple­mented on July 1, and de­mon­eti­sa­tion.


The in­dus­trial re­cov­ery in Au­gust was boosted by elec­tric­ity (8.3%) and min­ing (9.4%), while man­u­fac­tur­ing grew 3.1%. Cap­i­tal goods pro­duc­tion, an in­di­ca­tor of in­vest­ment ac­tiv­ity, was up 5.4% in Au­gust while a 6.9% rise in out­put of con­sumer non-durables or fast-mov­ing con­sumer goods (FMCG) in­di­cated strength in the ru­ral econ­omy. Con­sumer durables, which has a more ur­ban con­sump­tion bias, were up a mod­est 1.6% in Au­gust. The data sug­gests man­u­fac­tur­ing and de­mand are re­turn­ing to nor­mal after the dis­rup­tion caused by the GST roll­out, though not as strongly as an­tic­i­pated.

“The key sup­port to IIP growth has come from min­ing and elec­tric­ity. This shows that man­u­fac­tur­ing is still down and out. Even more dis­heart­en­ing is the growth of con­sumer durables at just 1.6% in Au­gust,” said Su­nil Kumar Sin- ha, prin­ci­pal econ­o­mist, In­dia Rat­ings.

Thirteen out of the 23 sub-sec­tors of man­u­fac­tur­ing with a weight of 27.0% in the IIP recorded a con­trac­tion in Au­gust 2017. “In our view, while the im­pact of post-GST re­stock­ing may have started to fade, in­ven­tory build­ing prior to the fes­tive sea­son is likely to have bol­stered man­u­fac­tur­ing growth in the just­con­cluded month. Nev­er­the­less, given the some­what un­favourable base ef­fect, we ex­pect the IIP growth to ease in Septem­ber 2017 rel­a­tive to print of 5.0% in Septem­ber 2016,” said Aditi Na­yar, prin­ci­pal econ­o­mist ICRA.

Septem­ber’s con­sumer in­fla­tion of 3.28% matched that of Au­gust, which was re­vised down from 3.36% es­ti­mated ear­lier, as food in­fla­tion slowed to 1.25% from 1.52% in the month be­fore and 3.96% in the year ago.

How­ever, most in­de­pen­dent economists ruled out the pos­si­bil­ity of a rate cut in De­cem­ber when the RBI gov­er­norled Mone­tary Pol­icy Com­mit­tee (MPC) meets to review key pol­icy rates.

“Core in­fla­tion… con­tin­ues to out­pace the head­line read­ing, which might re­in­force the cen­tral bank’s neu­tral stance. Risks on the fis­cal front will also play on the cen­tral bank’s hand,” said Radhika Rao, In­dia econ­o­mist, DBS Bank. The MPC kept rates un­changed at its last meet­ing ear­lier this month.

The stag­gered im­pact on the hous­ing in­dex of the CPI due to the in­crease in the house rent al­lowance (HRA) of cen­tral gov­ern­ment em­ploy­ees is likely to push up hous­ing in­fla­tion fur­ther over the com­ing year.

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