Bharti Airtel to acquire Tata's consumer telecom business

Bharti Airtel to acquire Tata's consumer telecom business

Bharti Airtel chairman Sunil Bharti Mittal said this is a significant development toward further consolidation in the Indian mobile industry. "It will further strengthen our already solid portfolio and create substantial long-term value for our shareholders given the significant synergies".

The announcement of the merger was made on Thursday.

The merger will also provide Bharti Airtel the right to use Tata's existing fiber network.

This acquisition also means Bharti Airtel would now get to possess close to 180 MHz of spectrum owned by Tata tele in 3 telecom bands- 850, 1800 and 2100 Mhz.

The merger will be executed on a debt-free cash-free basis, except for Bharti Airtel assuming a small portion of the unpaid spectrum liability of Tata's towards the department of telecom, which is to be paid on a deferred basis, according to the news release.

The deal, subject to regulatory approvals, will see over 4 crore customers of Tata Teleservices (TTSL) and Tata Teleservices Maharashtra (TTML) joining Bharti Airtel and mark further consolidation in one of the world's largest telecom markets.

With the latest merger, customers of Tata will be able to enjoy India's widest and fastest voice & data network, and bouquet of Airtel's best-in-class products and services.

The Bharti Board, which met on Thursday afternoon, has approved this transaction.

Through the deal Bharti has the potential to tap almost 40 million Tata Tele customers. The team of Bharti Airtel is said to be discussing the deal internally and might announce it officially later today or tomorrow.

"Instead of closing down the consumer mobile business, which would have entailed a much higher cost and involved letting go of employees and vendors etc, we have chosen this route", Tata Group chief financial officer Saurabh Agrawal told PTI.

Tata Teleservices and its unit Tata Teleservices (Maharashtra) Ltd have more than 40 million subscribers and rank ninth in India's telecoms market, which had a total of 1.2 billion mobile subscriptions at the end of July.

"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. "We have evaluated multiple options and are pleased to have this agreement with Bharti", said N Chandrasekaran, Chairman, Tata Sons.

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