Published: Thu, October 12, 2017
Sci-tech | By Carrie Guzman

Bharti Airtel to acquire Tata's consumer mobile business

Bharti Airtel to acquire Tata's consumer mobile business

In further consolidation of the Indian telecom industry, Bharti Airtel on Thursday entered into an agreement to acquire the mobile operations of troubled Tata Teleservices on a no-debt, no-cash basis.

The merger will bolster Bharti Airtel's spectrum pool with significant additional 178.5 MHz spectrum in 1800, 2100 and 850 MHz bands, all widely used for 4G. "Securities Private Limited is the financial advisor to Tata".

This merger, which is subject to regulatory approvals, is being done on "debt-free cash-free basis", with all past dues and liabilities to be settled by Tata. 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. According to the contract, both the companies agreed that all the debt would be paid off by Tata Teleservices and not Bharti Airtel. However, reports of Tata's trying to sell their mobile business to other competitors including Bharti Airtel were also doing rounds, but these reports didn't receive much media attention.

However, Bharti Airtel will have to partly bear Tata's Rs 10,000 crore spectrum liability, which the latter owes to Department of Telecommunication.

In March this year, Airtel's rivals - Vodafone India and Idea Cellular had announced merger plans to create India's largest telecom firm.

"We believe today's agreement is the best and most optimal solution for the Tata Group and its stakeholders". TTSL and TTML's operations, across the nineteen circles (17 under TTSL and 2 under TTML) it is present in, will be absorbed by Airtel. Finding the right home for our longstanding customers and our employees has been the priority for us.

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A Bharti Airtel office building is pictured in Gurugram, previously known as Gurgaon, on the outskirts of New Delhi, India April 21, 2016. "We have evaluated multiple options and are pleased to have this agreement with Bharti", Tata Son's chairman, N Chandrasekaran said.

Tata and Bharti Airtel will work together to further explore other mutual areas of cooperation, noted Bharti Airtel in the news release.

Tata is also in initial stages of exploring combination of its enterprise business with Tata Communications and its Retail Fixed Line and Broadband business with Tata Sky.

Through the deal Bharti has the potential to tap almost 40 million Tata Tele customers.

"While the fate of employees is not clear, the consideration that manpower planning will be done based on business lines is good".

Note that Tata will retain its stake in the telecom infrastructure company Viom Networks, which is a joint venture between Tata Teleservices and SREI Infrastructure.

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