Airtel agrees to acquire Tata mobile businesses in cash-free deal

13 Oct 2017

Indian mobile market leader Bharti Airtel has agreed to acquire the consumer mobile businesses of Tata Group’s Tata Teleservices Limited (TTSL) and Tata Teleservices (Maharashtra) Limited (TTML) divisions, the company announced in a statement to the Indian bourse. The transaction will be completed on a cash-free and debt-free basis, although Bharti Airtel will take on a portion of Tata’s unpaid spectrum liabilities, which are to be paid on a deferred basis. The takeover is subject to regulatory approval and will see Tata’s wireless operations across 19 circles (17 through TTSL and two via TTML) merged into Bharti Airtel. Under the agreement, all of the customers and assets of TTSL/TTML will be transferred to Airtel, including its more than 40 million subscribers and a portfolio of 178.5MHz of spectrum (71.3MHz of which is liberalised) across the 850MHz, 1800MHz and 2100MHz bands. Other elements of Tata’s telecoms business – such as its Tata Communications division and retail fixed line telephony and broadband operations – will be retained by Tata Group, although Tata has agreed to provide Airtel with an indefeasible right of use (IRU) for part of its existing fibre network. Notably, Tata will also keep its stake in telecom tower firm Viom Networks.

Commenting on the move Bharti Airtel Chairman Sunil Mittal was quoted as saying: ‘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 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.’

The announcement follows reports over the last fortnight that Tata was looking to close down its wireless operations, having previously failed to find a buyer for the loss-making and debt laden business. As noted by TeleGeography’s GlobalComms Database, Airtel and Tata entered talks in July this year over a potential tie-up of their combined operations – including Tata’s satellite TV arm Tata Sky – but were unable to reach an agreement. The acquisition also represents the second cash-free takeover agreed by Airtel, as the operator looks to shore up its position at the head of India’s intensely competitive wireless segment. In February 2017 Airtel agreed to acquire Norwegian-backed cellco Telenor India (47 million subscribers at end-June 2017), taking on the operator’s licences, spectrum and infrastructure as well as its remaining spectrum payments and other operational contracts.

India, Bharti Airtel, Tata Communications, Tata Teleservices (TTSL, incl. TTML, Tata Tele Broadband), Telenor India