Bharti ac­quires Tatas’ mo­bile arm

The Hindu - - FRONT PAGE - Spe­cial Cor­re­spon­dent

The coun­try’s largest oper­a­tor Bharti Air­tel on Thurs­day said it would ac­quire the loss-mak­ing con­sumer mo­bile busi­ness of the Tata Group on a ‘debt­free, cash-free’ ba­sis, while tak­ing on some spec­trum-re­lated cost. The deal, which is Bharti Air­tel’s sev­enth ac­qui­si­tion in the past five years, will en­tail the oper­a­tor pay­ing a “small por­tion” of un­paid spec­trum li­a­bil­ity of the Tatas, es­ti­mated at ₹2,000 crore.

All past li­a­bil­i­ties and dues would be set­tled by the Tatas, the com­pa­nies said in a joint state­ment, adding that Air­tel would ac­quire 40 mil­lion sub­scribers of Tata Te­le­ser­vices Ltd. and Tata Te­le­ser­vices Ma­ha­rash­tra Ltd. across 19 cir­cles. “These cir­cles rep­re­sent the bulk of In­dia’s pop­u­la­tion and cus­tomer base,” the state­ment said.

Tata Te­le­ser­vices has a debt of about ₹31,000 crore. The pro­posed merger will in­clude trans­fer of all the cus­tomers and as­sets of the Tatas’ con­sumer mo­bile busi­ness to Bharti Air­tel. “It will also en­able Bharti Air­tel to fur­ther bol­ster its strong spec­trum foot­print with the ad­di­tion of 178.5 MHz spec­trum (of which 71.3 MHz is lib­er­alised) in the 850, 1800 & 2100 MHz bands,” the state­ment added.

The deal is likely to help Bharti Air­tel nar­row the gap with the Voda­fone-Idea com­bined en­tity that would have about 400 mil­lion cus­tomers once the merger is con­cluded.

Bharti Air­tel, which is also in the process of ac­quir­ing the In­dia op­er­a­tions of Nor­way’s Te­lenor, has about 300 mil­lion sub­scribers with a mar­ket share of about 24%. The Bharti Air­tel-Tata’s CMB com­bined en­tity is likely to have a mar­ket share of about 27-28%, against the es­ti­mated 34% of the Voda­fone-Idea com­bined en­tity. The deal will also help the firm widen its lead over the Mukesh Am­bani-led Re­liance Jio.

Ma­hesh Up­pal, Di­rec­tor at tele­com con­sult­ing firm ComFirst said, “Air­tel cer­tainly has got a bar­gain. Tata’s op­tions were lim­ited. They were los­ing money and were far­ing badly on mar­ket share as well as rev­enues. Air­tel gets their sub­scribers and their spec­trum. I think Air­tel would be helped in­cre­men­tally.”

Ear­lier this week, in an in­ter­view to a TV chan­nel, Tata Sons Chair­man N. Chan­drasekaran had ad­mit­ted that the mo­bile con­sumer busi­ness is “re­ally in bad shape” and “close to im­pos­si­ble for us to be able to re­cover. So that is a com­pany that we have got to find a so­lu­tion for very quickly.”

Tata CMB’s op­er­a­tions and ser­vices will con­tinue as nor­mal un­til the com­ple­tion of the trans­ac­tion, the com­pa­nies said, adding that the deal was sub­ject to reg­u­la­tory ap­provals.

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