The Bharti Airtel-Tata Play entity may not have representatives from the Tata Group on board

Discussions between Bharti Airtel to acquire Tata Play are at an advanced stage. The combined entity will represent over 38 million direct-to-home (DTH) subscribers or more than 60 per cent of the market, making it the largest player.

For some time now, it appears that the Tata family has been looking to exit the business. At the consolidated level (DTH and broadband combined), for FY24, total income stood at Rs 4,327 crore, a slight decline from Rs 4,530 crore in the previous fiscal. However, its losses rose from Rs 102 crore to Rs 433 crore or an increase of more than 4X.

People familiar with the deal told Business Today that the resulting new merged entity (between Bharti Telemedia comprising the group’s DTH business and Tata Play), will not have any representation from the Tata group. “The outlines are still being worked out and it is possible that there will be a stock arrangement,” they said. It is expected that there will be significant operating and cost synergies.

Neither Tata Play nor Bharti Airtel responded to an email from Business Today seeking comments on the issue.
In December 2022, Tata Play had secretly filed for IPO with SEBI. This plan was later shelved. In the case of Bharti Telemedia, (a subsidiary of Bharti Airtel), a report prepared by Crisil Ratings last July says the company had a revenue of Rs 3,045 crore with a loss of Rs 76 crore.

DTH’s overall story has not been easy when it comes to attracting new subscribers. Data released by the Telecom Regulatory Authority of India (TRAI) shows overall numbers falling from 62.17 million in June 2024 to 59.91 million in September 2024. Compare that to 64.18 million in September 2023, with Tata Play clearly dominating the market with a 31.99 share in 100 and 29.38 per cent for Airtel. Dish TV accounts for nearly 20 per cent, while Sun Direct follows with 19 per cent. The challenging business scenario is attributed to the increasing number of subscribers taking the OTT route to consume content, a trend that has become very noticeable in the post-pandemic world.

From a strategic point of view, the deal is expected to help Airtel strengthen its presence in the digital TV space. For Tatas, which sold its mobile business, Tata Teleservices, to Bharti Airtel in 2017, this will mark an exit from the business that was launched in 2001. In terms of shareholding, Tata Sons has a 70 per cent stake in Tata Play.

The 10 percent stake was acquired by Singapore’s Temasek, which was bought by Tata Sons last April (Temasek made that investment in 2007) for about $100 million — and, more importantly, it reduced the value of Tata Play to $1 billion, a sharp decline from $3 billion. dollars previously. To the epidemic. The Walt Disney Company owns the other 20 percent after Rupert Murdoch’s acquisition of 21st Century Fox.