Airtel Tata merger

Airtel Tata merger: The extensive re-organisation of the mobile telecom industry doesn’t seem to come to an end now with Bharti Airtel announcing on Thursday it decision to merge with the consumer mobile business of Tata Teleservices. This will eventually lead to the farewell of Tata Group from the immensely cut-throat sector after a span of nearly 15 years. As per the press release, Bharti Airtel is all set to take over as many as 19 circles under Tata Teleservices as part of the merger. Out of the 19, 17 circles come under Tata Teleservices Limited where as the other 2 form part of the Tata Teleservices Maharashtra Limited.

The consumer mobile business under the Tata group has been making losses consistently for sometime now and this merger will come through on a debt-free and cash-free basis as per the statement released by the company. TV news reports also suggest that Tata will be paying off majority of its liability to the Department of Telecommunications towards spectrum payment as part of this deal, with Bharti Airtel agreeing to pay off just a portion of this unpaid spectrum liability that will roughly come up to 2000 crore. This will be done by them in a deferred manner. According to experts, this sum of liability is on the lower side owing to the fact that Tata Teleservices were barely assertive in their engagement in the last spectrum auction.

This merger comes after the Vodafone-Idea merger, which eventually made them No.1 in the Indian telecom business sector, with their combined subscriber base crossing 400 million. As far as Airtel’s gains from this deal go, it will add close to 180 MHz of spectrum to its block. Tata’s 40 million subscribers will also come under Airtel’s umbrella now. This will take airtel’s total consumers to over 320 million from it’s existing 280 million subscribers. This is subject to the drop-outs that take place when a brand/ownership shake up takes place. Airtel will also gain the right to use Tata’s existing network of fibre.

As per Airtel’s press release, it will retain its stake in Viom and its associated liabilities.