News
Report claims Indian firms exploring possible tie-up of telco, international cable, enterprise, DTH businesses.
Bharti Airtel and Tata Group have held preliminary talks about a merger that would consolidate Airtel’s position as India’s biggest mobile operator and defend it against upstart newcomer Reliance Jio Infocomm.
According to an Economic Times report on Friday, the two sides have discussed the potential combination of Tata Teleservices, Tata Communications and its direct-to-home (DTH) satellite TV arm Tata Sky, with Bharti Airtel, which includes its own DTH unit.
In all, the mega-merger would encompass the respective companies’ telecoms, TV, and overseas cable and enterprise assets.
In the highly-competitive mobile market, the combination of Bharti Airtel and Tata Teleservices would create a player with 324.03 million subscribers, according to recent figures from the Telecom Regulatory Authority of India (TRAI). Of course, Bharti Airtel has also already agreed to acquire Telenor India, which currently has 49.34 million mobile subcribers.
It is not just about customers though. Merging two nationwide players would significantly bolster their combined mobile network capacity, helping to improve quality, coverage, and throughput.
The scale benefits of such a tie-up would help Bharti Airtel fend off the competitive threat posed by Reliance Jio Infocomm, which has disrupted the market with low-cost mobile services, and by the merger of Vodafone and Idea Cellular, the country’s second and third-biggest players respectively.
A deal also offers Tata Group a way out of the mobile market; the conglomerate reportedly held talks to that effect with Vodafone in 2014.
However, it is far from a done deal; according to the Economic Times report, talks are at a preliminary stage and could steal lead nowhere.
