Tata Teleservices to merge consumer mobile business with Bharti Airtel

Tata Teleservices to merge consumer mobile business with Bharti Airtel

This had prompted Bharti Airtel to acquire the Indian business of Norway's Telenor ASA earlier this year and Vodafone Group Plc's India unit to merge with Aditya Birla Group company Idea Cellular Ltd.

Businesses (CMB) of TTSL and TTML into Bharti Airtel.

As part of the agreement, Bharti Airtel will absorb Consumer Mobile Businesses (CMB) of TTSL and TTML across the country in 19 circles (17 under TTSL and two under TTML).

Even 70-80 per cent of the Rs 9,000-10,000 crore deferred payments for spectrum that TTSL holds, will be paid by Tatas.

The development marks another consolidation in a sector that has been going through a turbulent period ever since billionaire Mukesh Ambani's Reliance Jio Infocomm Ltd started operations a year ago.

The announcement of the merger was made on Thursday. But it also gets 40 million additional customers to the fold. This comes after 4 months of continuous talks between the two companies and finally, N Chandrasekaran, the head at Tata Sons can look to focus on other verticals of Tata Sons as the telecom business was one of the loss-making verticals of the Tata Sons.

In its statement, Tata also said that it is in initial stages of exploring the opportunity of merging its Enterprise Business with Tata Communications, and, its Retail Fixed Line and Broadband business with Tata Sky.

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It added that its Board met today and has instructed the management to appoint independent advisors to "evaluate the strategic fit as well as the financial merits of the potential transaction". The merger will be debt-free and cash-free, which implies that Airtel won't be adding any significant liabilities in the deal.

Apart from that, this agreement also gives Airtel the right to use Tata's existing fibre network.

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.

"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 Private Limited is financial adviser to Tata.

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