Published: Thu, October 12, 2017
Science | By Hubert Green

Bharti Airtel to acquire Tata's consumer mobile business

Bharti Airtel to acquire Tata's consumer mobile business

Moreover, as a part of this transaction, Airtel will also be assuming a small portion of the unpaid spectrum liability of Tata towards the Department of Telecom.

"This is 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.

"This is a good deal for Airtel and enables them to potentially become very strong and dominant player in data services market", said GV Giri of IIFL.

After merger Bharti Airtel will get additional spectrum in 1800, 2100 and 850 MHz bands, which are widely used for 4G. That comes to around Rs 1500-2000 crore. Tata Group's telecom arms - both Tata Tele (TTSL) and Tata Teleservices Maharashrta (TTML) will now be merged with Bharti airtel.

As of end-March, Tata Teleservices and its unit had combined debt of Rs 34,089 crore ($5.24 billion) excluding sums due to the government for spectrum purchases, according to local ratings agency Crisil, which also said Tata Teleservices' net loss almost doubled in the year to March, to Rs 4,617 crore. " said Mr. Sunil Bharti Mittal, Chairman of Bharti Airtel". 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 Son's chairman, N Chandrasekaran said.

Goldman Sachs (India) Securities Private Limited is financial adviser to Tata.

In a joint statement the pair said Bharti would take on Tata's 40 million subscribers, boosting its customer base, and add network coverage as it tries to fend off the rise of Reliance Jio, owned by India's richest man.

An official statement reads, "The Boards of Tata Sons, TTSL and TTML separately approved this transaction".

Tata will retain its stake in Viom, and will take care of the liabilities associated with it.

"This merger is pretty much in line with industry expectations".

The Bharti Airtel-Tata Tele combined entity would also have a share of around 40 per cent in the total telecom revenues, which will be just behind the projected 44 per cent for the Idea-Vodafone combine.

"This deal will bring in more stability for Airtel".

The Karbonn A40 Indian phones come with a retail tag of 3,499 rupees, but Bharti Airtel customers can buy them for an upfront payment of 2,899 rupees and receive cashback of 1,500 rupees.

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

"The employees of Tata will be demerged on the lines of the two businesses ie CMB and EFL (Enterprise and Fixed Line and Broadband), and post an optimal manpower planning will be moved accordingly", it added.

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