Tata Teleservices Limited and Tata Teleservices Maharashtra Limited (Tata) is set to enter a formal merger with Bharti Airtel for the mobile businesses. The telecom operator has officially announced that it has entered into an agreement to merge the Consumer Mobile Businesses (CMB) of TTSL and TTML into Bharti Airtel.
Although the two companies have entered into an understanding, the acquisition of the mobile businesses by Airtel is pending regulatory approvals. As part of the merger, Airtel will absorb Tata’s consumer mobile business operations across the country in nineteen circles (17 under TTSL and 2 under TTML). This includes over 40 million customers who would add to Airtel’s userbase.
Bharti Airtel will also assume a small portion of the unpaid spectrum liability of Tata. Additional spectrum in 1800, 2100, and 850 MHz bands will be added to Airtel’s pool and further help the operator strengthen its 4G network.
The merger will also provide Bharti Airtel the right to use Tata’s existing fiber network. The merger is on a debt-free cash-free basis. Tata employees will be demerged on the lines of the two businesses CMB and EFL (Enterprise and Fixed Line and Broadband), and will be moved after an optimal manpower planning. Tata CMB’s operations and services will continue as normal until the completion of the transaction, and it will retain retain its stake in Viom. ALSO READ: Bharti Airtel, Vodafone, Idea, other telcos under-reported Rs 61,064 crore revenues: CAG
On the merger with Tata, Bharti Airtel Chairman, Sunil Mittal said, “This is a significant development towards further consolidation in the Indian mobile industry and reinforces our commitment to lead India’s digital revolution by offering world-class and affordable telecom services through a robust technology and solid spectrum portfolio. 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. The customers of Tata will be able to enjoy India’s widest and fastest voice & data network, and bouquet of Airtel’s best-in-class products and services.”
“The acquisition of additional spectrum made an attractive business proposition. It will further strengthen our already solid portfolio and create substantial long term value for our shareholders given the significant synergies,” Mittal added.
N Chandrasekaran, Chairman, Tata Sons, said, “We believe today’s agreement is the best and most optimal solution for the Tata Group and its stakeholders. 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.” ALSO READ: Reliance Jio: A timeline charting out the journey of India’s most disruptive telco
The merger is the latest in the continued consolidation efforts seen across the financially strapped telecom sector in India. Following the commercial launch of Reliance Jio 4G services, incumbent operators have been thrown out of gear and players have been joining hands to ease better fight the juggernaut. Idea Cellular has also received approval for the $23-billion merger with Vodafone. The merger is expected to be completed by 2018.