Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.

    SUBMIT

Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence

Disclaimer:

Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
LIVE TV DownloadNews18 App
News18 English
»
3-min read

Airtel to Acquire Struggling Tata Tele on No-debt, No-cash Basis

Airtel, for whom it will be the 7th acquisition in five years, will from November 1 take over 4 crore customers of Tata Teleservices Ltd (TTSL) and Tata Teleservices Maharashtra Ltd (TTML) in 19 telecom circles.

PTI

Updated:October 13, 2017, 10:24 AM IST
facebookTwitterskypewhatsapp
Airtel to Acquire Struggling Tata Tele on No-debt, No-cash Basis
Jio Effect: Airtel Brings a New Prepaid Recharge of Rs 119 Bundling 2GB Data And Unlimited Voice
Loading...

New Delhi: Bharti Airtel will acquire Tata Groups loss-making mobile telephony business, almost 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.

Airtel, for whom it will be the 7th acquisition in five years, will from November 1 take over 4 crore customers of Tata Teleservices Ltd (TTSL) and Tata Teleservices Maharashtra Ltd (TTML) in 19 telecom circles or zones on "a debt-free cash-free basis", the two groups announced in separate but identical press statements.

TTSL and TTML employees in the 19 circles, managing the consumer mobile business, along with 178.5 MHz of spectrum across 800, 1800, 2100 Mhz (3G, 4G) bands would be transferred to Airtel.

While all of the Rs 31,000 crore debt will remain with the Tatas, Airtel will assume payment of close to 20 per cent of the Rs 9,000-10,000 crore deferred payments for the spectrum to the government. Tatas will pay the rest.

In February, Airtel absorbed Telenors’ operations in seven circles - Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam in a similar no cash deal.

The telecom sector is in a consolidation mode since the September 2016 entry of India's richest man Mukesh Ambani's Reliance Jio, which has given incumbent operators a run for their money through free voice calling and cheap data offers. Jio has gained 12.8 crore subscribers with in a year.

Earlier this year, Vodafone India and Idea Cellular agreed to merge their operations to create the country’s largest telecom operator worth more than USD 23 billion (roughly Rs 1,51,153 crore) with 35 per cent market share.

With this deal, Airtel will have over 32 crore customers, way below 40 crore users with the merged Vodafone-Idea entity.

"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.

He said Tatas will retain stake in the tower company, Viom, and explore transferring the enterprise business to Tata Communications and retail fixed-line and broadband business to satellite TV arm Tata Sky.

The board of the two firms will evaluate the opportunity and decide in 4-6 weeks, he said.

The struggling mobile consumer business, Agrawal said, "should have been restructured long back" and when new group chairman N Chandrasekaran took over in February, he reached out to people who could help out.

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.

Through this deal "Tatas have taken all the pain" associated with the business and ensure that business is not shut, employees not sacked and vendors and other trades associated with it are not thrown out of business, he said.

Without giving the exact number of employees being transferred to Airtel, he admitted that the Sunil Bharti Mittal firm may look at optimisation of staff on ground after the merger.

"The merger is being done on a debt-free cash-free basis, except for Bharti Airtel assuming a small portion of the unpaid spectrum liability of Tatas towards the Department of Telecom, which is to be paid on deferred basis," the statements said.

While Bharti Airtel will also have an "indefeasible" right to use for part of the existing fibre network of Tata, TTSL and TSMLs consumer mobile business operations and services will continue as normal until the completion of the transaction.

The 19 circles coming to Bharti "represent bulk of India’s population and customer base", it said.

Tata and Bharti Airtel will work together to further explore other mutual areas of cooperation, that will be value accretive for both the Groups, the statement said.

"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," said Sunil Mittal, chairman of Bharti Airtel.

Goldman Sachs (India) Securities Pvt Ltd acted as financial adviser to Tata.

"We believe today’s agreement is the best and most optimal solution for the Tata Group and its stakeholders," said Chandrasekaran. "We have evaluated multiple options and are pleased to have this agreement with Bharti."

(Disclaimer: News18.com is part of Network18 Media & Investment Limited which is owned by Reliance Industries Limited)

Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.

Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months. Use code FREEDOM.

| Edited by: Aakarshuk Sarna
Read full article
Loading...
Next Story
Next Story

Also Watch

facebookTwitterskypewhatsapp
Most Active
Company Price Change %Gain
20 Microns 34.85 4.50
Hexaware Tech 379.15 -2.10
Atul 3,599.80 0.63
Amrutanjan Heal 290.25 -0.38
Company Price Change %Gain
NESCO 536.00 1.12
Monotype India 0.19 0.00
Manugraph Ind 14.65 3.90

Live TV

Loading...
Countdown To Elections Results
To Assembly Elections 2018 Results