Tata's Telecom Business Merging with Airtel to create growth prospects in Telecom Market

Posted on: Nov-2017 | By: MarketDeeper | Technology

Telecom company Tata Teleservices will merge into Bharti Airtel. This deal is believed to be one of the world’s largest in the telecommunications markets and another strong signal of integration in India.

Under the proposed deal, Tata Teleservices TTSL and Tata Teleservices Maharashtra TTML will move its more than 4 Crore subscribers in Bharti Airtel. However, regulatory approval for the deal is yet to be taken.

It is notable that Tata Group's company Tata Teleservices is trying to cross over its financial problems while coming out of the mobile telephone business.

Both companies have said in a shared statement that this deal is based on “no loan-no cash” basis. That is, Airtel will not share any of the debt of Rs 40,000 Crore of Tata Teleservices and neither will pay cash.

Even for the spectrum bought by TTSL, the payment of 70–80% of the delayed payment of Rs 9,000–10,000 Crore will also be paid by Tata.

Bharti Airtel Chairman, Sunil Mittal has termed this deal as a significant development in the direction of strengthening the Indian mobile industry. He said that extra spectrum acquisition would create attractive business establishments.

Tata Sons Chairman N Chandrasekharan has said that this explanation is the best and best solution for the Tata group and its partners. He has stated that this idea has been made with Airtel after considering several options.

It is notable that the Indian telecom industry is on the path of integration through mergers and acquisitions, and analysts believe that this deal will further strengthen this process. In March of this year Vodafone India and Idea Cellular had also announced the merger.

Bharti Airtel will merge the operations of Tata CBM in 19 telecom circles under this deal. This merger will increase Bharti Airtel's spectrum pool of 178.5 MHz in the 1800, 2100 and 850 MHz band.

Bharti Airtel, Tata Sons, TTSL, and TTML boards have approved this deal.

According to this, Tata and Bharti will also consider other common areas of Airtel cooperation.

On the grounds where Reliance Jio has no head-to-head competitor, this merger will reinforce Airtel’s foundation to expand its spectrum and network strength for competing with equivalent potential.