Bharti Airtel to acquire Tata's consumer telecom business

Bharti Airtel to acquire Tata's consumer telecom business

India's largest mobile service provider Bharti Airtel is all set to acquire Tata Teleservices' losing making mobile business.

This merger will be carried out on a debt-free cash-free basis, with one exception: Airtel will have to pay a part of Tata's unpaid spectrum liability to the Department of Telecom (DoT), on a deferred basis.

Bharti Airtel will acquire Tata Group's loss-making mobile telephony business, nearly for free, boosting its spectrum holding and raising subscriber base while saving the Tatas from the prospect of having to shut down the struggling unit.

"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".

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Companies with higher future earnings are usually expected to issue higher dividends or have appreciating stock in the future. Moreover, Commonwealth Equity has 0.04% invested in T-Mobile US Inc (NASDAQ:TMUS). 4,391 are held by Signature Fincl.

In a joint statement the pair said Bharti would take on Tata's 40 million subscribers, boosting its customer base, and add network coverage as it tries to fend off the rise of Reliance Jio, owned by India's richest man. Buying spectrum, keeping spectrum, getting the right partner, frequent changes in policies, several courter orders, etc. have impacted the telecom business of Tata Group. It is beset with a liability of Rs 7,200 Crore which is to be paid to NTT Docomo as arbitration award for the latter's 21.6 per cent stake in Tata Teleservices. "It will further strengthen our already solid portfolio and create substantial long term value for our shareholders given the significant synergies", Mittal added further. Finding the right home for our longstanding customers and our employees has been the priority for us.

According to earlier reports, TTSL has seen its net worth fall by over Rs 11,600 crore in FY17, and losses increase from Rs 2,409 crore to Rs 4,617 crore year-on-year.

Tata Teleservices Limited and Tata Teleservices Maharashtra Limited (Tata) is set to enter a formal merger with Bharti Airtel for the mobile businesses. Tata employees will be demerged on the lines of the two businesses CMB and EFL (Enterprise and Fixed Line and Broadband), and will be moved after an optimal manpower planning. "Securities Private Limited is the financial advisor to Tata". "We have evaluated multiple options and are pleased to have this agreement with Bharti", Tata Son's chairman, N Chandrasekaran said. Vodafone and Idea combined will have access to 28 per cent of the airwaves while Reliance Jio has about 19 per cent of all spectrum. All the assets and customers of Tata Tele will be transferred to Airtel after the deal.

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