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Airtel continues consolidation spree with Tata deal

12 OCT 2017

Bharti Airtel agreed to acquire Indian conglomerate Tata Sons’ consumer mobile units as the country’s market leader bolsters its presence in the face of increased competition.

In a statement, Tata Sons said it had entered an agreement to merge its Consumer Mobile Businesses (which consist of Tata Teleservices and Tata Teleservices Maharashtra) with Airtel, although financial details were undisclosed.

The move gives Airtel access to some 42 million Tata Teleservices subscribers, according to official figures covering the period to end-July, in addition to a strengthened spectrum footprint.

As part of the agreement, Airtel said it would assume a small portion of unpaid spectrum liability.

Tata Teleservices operates 19 circles which cover “the bulk of India’s population” said the company, and Airtel will also have use of Tata’s existing fibre network.

Consolidation continues
Along with today’s acquisition, Airtel is also in the process of acquiring Telenor India. Number two player Vodafone India, meanwhile, is in the process of merging with the country’s third largest player Idea Cellular, with the combined company looking to establish itself as the new market leader in the country.

India’s more established operators have been spurred into action by new entrant Reliance Jio, which nabbed a significant market share since its launch in September 2016 with low cost 4G offers.

Sunil Bharti Mittal, chairman of Bharti Airtel said the Tata Teleservices deal was “a significant development towards further consolidation in the Indian mobile industry.”

“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,” he added.

Tata struggles
In the face of increased consolidation and competition, Tata Sons’ mobile business fell down the pecking order in India.

Indeed, the company was reportedly looking to sell its telecoms arm for a few years now.

In early 2017, Tata Group and Bharti Enterprises began discussions about combining their telecoms, overseas cable, enterprise services and TV businesses together in a mega merger.

Bharti, however, ditched the plan in August, stating it wanted to focus on its acquisition of Telenor India and offload part of its stake in tower business Bharti Infratel.

“Finding the right home for our longstanding customers and our employees has been the priority for us. We have evaluated multiple options and are pleased to have this agreement with Bharti,” Tata Sons’ chairman Natarajan Chandrasekaran said.

Author

Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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