The Tata Group and Bharti Enterprises have held exploratory talks to evaluate a mega alliance involving their telecom, overseas cable and enterprise services, and direct-to-home TV businesses.
Discussions between both sides have revolved around a possible merger between unlisted Tata Teleservices and Tata Sky and the listed Tata Communications with the Sunil Mittal-owned Bharti Airtel, which includes its wholly owned DTH arm.
The discussions are still at a preliminary stage and there is no certainty that this will lead to any deal. But if the alliance does fructify, it will consolidate the Indian telecom market still further, and narrow the field down to three main players: Idea-Vodafone, Reliance Jio, and the Airtel-Tata combine.
The merger will enable Bharti Airtel, the bigger partner in the alliance, to close the gap between Idea-Vodafone both in terms of numbers of subscribers as well as revenue market share. Airtel has nearly 280 million mobile phone users in India while Tata Teleservices has around 48 million. Airtel will also get access to a ready network including 4G bandwidth in the much-sought-after 800 MHz band.
For the Tatas, the merger will provide an opportunity to fold their loss-making telecom business into a bigger company and become minority investors. The Tatas have been looking to exit the business for the last few years and in the past had also held discussions with Vodafone. The over-Rs 30,000-crore debt and its dispute with former partner NTT Docomo had, however, made any progress on this front difficult.
By Baishakhi Dutta