Monday, 16 October, 2017

Bharti Airtel to merge with Tata telecom business

Bharti Airtel, Tata to merge consumer mobile businesses Tata Teleservices to merge with Bharti Airtel as Chandrasekaran offloads dragging business
Theresa Hayes | 12 October, 2017, 22:24

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

Goldman Sachs (India) Securities Private Limited is financial adviser to Tata. Both these telecom operators announced their merger back in March this year, and after the transaction is complete, this merger will create the single largest telecom operator in India.

Earlier in the week, Chandrasekaran had said that Tata Teleservices was in a really "bad shape" and in a debt of Rs 31,000 crore. 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.

According to sources, Tata Sons is saddled with over Rs.66,500 Crore of debt and liabilities as a result of Tata Teleservices merger with Bharti.

Bharti Airtel Chairman Sunil Bharti Mittal was quoted by IANS saying, "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.

Tata Sons Chairman N Chandrasekaran had recently conceded that the groups mobile business Tata Teleservices is in a "really bad shape" and that a "tough call" will have to be taken on the business in this financial year.

The agreement, signed in 2008, failed to attract enough customers and Docomo triggered an option to sell its stake six years later after incurring losses.

A Bharti Airtel office building is pictured in Gurugram, previously known as Gurgaon, on the outskirts of New Delhi, India April 21, 2016.

It already works with most leading telcos in the country, including Airtel, Aircel, MTS, Vodafone, Idea, Uninor and BSNL among others, besides Tata Teleservices. For Bharti Airtel, it's a chance to acquire Tata Teleservices' infrastructure and customers.

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.

"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.

Agrawal, who in July joined Tatas from Aditya Birla Group, said closing down the business would have been against the ethos of Tata Group and would have rendered employees jobless.