Finally, the deal is ‘ON’. India’s largest telecom operator Bharti Airtel is on a take over hunt and the latest one for them is the debt-hit Tata Teleservices. Airtel will acquire the consumer mobile business (CMB) of Tata Teleservices Ltd (TTSL) and Tata Teleservices Maharashtra Limited (TTML). This acquisition also includes the Tata Docomo and Photo business.
The merger will be a debt-free, cash-free deal. So, Airtel will be getting the whole asset of Tata Teleservices virtually for free. Except for assuming a small portion of the unpaid spectrum fees of Tata’s owes to the Department of Telecommunications (DoT), which is to be paid on a deferred basis.
With the merger, Airtel will get Tata’s entire consumer mobile business unit spread across 19 telecom circles in India. This includes 17 telecom circles under Tata Teleservices Ltd and 2 under Teleservices Maharashtra Limited. Under this telecom circles, Tata combinedly has over 44 million subscribers.
In addition, to the bulk of subscribers moving to Airtel’s network, the operator will also gain additional spectrum. Around 178.5 megahertz (MHz) spectrum (of which 71.3MHz is liberalized) in the 850MHz, 1,800MHz and 2,100MHz bands will be added to Airtel’s spectrum pool. This will further strengthen Airtel’s 4G network across India.
Airtel will also have access to existing fibre network of the Tata companies. Employees of TTSL and TTML will be divided into the lines of the two businesses, which are CMB and EFL (Enterprise and Fixed Line and Broadband). Then they will be moved after an optimal manpower planning.
“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 have been the priority for us. We have evaluated multiple options and are pleased to have this agreement with Bharti,” said N Chandrasekaran, Chairman, Tata Sons.
“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. The customers of Tata will be able to enjoy India’s widest and fastest voice & data network, and a bouquet of Airtel’s best-in-class products and services,” said Sunil Bharti Mittal, Chairman, Bharti Airtel.
For Tata Teleservices customers the merger will be a great chance to experience Airtel’s high-speed advanced 4G LTE network across India. They will also get better service, better network coverage and better mobile plans.
Airtel, Tata Teleservices CMB Merger
- Airtel to acquire consumer mobile business of Tata Teleservices Ltd and Tata Teleservices Maharashtra Limited.
- The merger will be a debt-free, cash-free deal.
- Airtel will own all the customers and assets of Tata CMB spread across 19 telecom circles in India.
- Around 178.5 MHz spectrum (of which 71.3MHz is liberalized) in the 850MHz, 1,800MHz and 2,100MHz bands will be added to Airtel’s specturm portfolio.
- Airtel will gain more customers and will also strengthen its 4G LTE network with the added spectrum.
- Airtel will gain the right to use for part of the existing fibre network of Tata.
- Tata can offload its loss-making telecom business.
- Tata Teleservices customers would gain by enjoying the 4G LTE service from Airtel.
The merger between the two telecom operators is subject to requisite regulatory approvals. Till then Tata consumer mobile business operation and service will continue as normal. This also marks the exit of once revolutionary consumer telecom business Tata Docomo, Tata Indicom and Tata Photon.
Bharti Airtel also has another merger going on with Norwegian Telenor’s India telecom unit – Telenor (India) Communications Pvt Ltd or Telenor India. As part of the acquisition, Airtel will completely take over Telenor assets and operation in six telecom circles of India.