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Airtel snaps up Tata’s Indian mobile operations

Airtel snaps up Tata’s Indian mobile operations

Bharti Airtel has reached an agreement to acquire Tata Sons’ consumer mobile units.

The agreement still requires regulatory approvals, but will see Tata settling its debts and liabilities while Airtel will absorb all Tata consumer mobile operations – Tata Teleservices and Tata Maharashtra – including assets and subscribers. This will increase the market leader’s Indian customer base by around 42 million.

Tata’s assets include spectrum in the 1.8GHz, 2.1GHz and 850MHz bands, as well as a fibre network. However, to use this, Bharti will be required to assume some of the unpaid spectrum liability. Tata Teleservices holds spectrum in 19 of India’s 22 telecoms circles, covering “the bulk of India’s population”.

Bharti Airtel chairman Sunil Bharti Mittal said: “This is a significant development towards further consolidation in the Indian mobile industry. The acquisition of additional spectrum made an attractive business proposition. On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position in several key circles.”

Tata Sons’ chairman Natarajan Chandrasekaran said: “Finding the right home for our longstanding customers and our employees has been the priority for us. We have evaluated multiple options and are pleased to have this agreement with Bharti.”

Fierce competition has prompted a wave of consolidation among some of the largest players in India, with Vodafone India and Idea Cellular – respectively numbers two and three in the market – in the process of merging to create a new market leader. Tata has struggled in this environment, having only recently settled a $1.2 billion dispute with minority shareholder NTT Docomo. Tata Sons has been looking to divest its mobile unit for some time, and rumours have long tipped Bharti Airtel as a potential buyer.

Earlier this year, the Bharti Enterprises and Tata Group held talks over a potential ‘mega merger’ that would have combined their telecoms, cable, TV and enterprise businesses. However, Bharti shelved this plan in August, claiming it was too busy with its acquisition of Telenor’s Indian unit and divestment of part of its Bharti Infratel holding.

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