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

Talks between Bharti Airtel to acquire Tata Play have now reached an advanced stage. The combined entity will account for more than 38 million direct-to-home (DTH) subscribers or more than 60 percent of the market, making it the largest player.

For some time, it is gathered, the Tatas have been trying to get out of the business. At a consolidated level (DTH and broadband together), for FY24, it had a total revenue of Rs 4,327 crore, a slight decline from Rs 4,530 crore for the previous fiscal. However, its losses increased from Rs 102 crore to Rs 433 crore or an increase of more than 4X.

Those familiar with the deal told Business Today that the resulting new merged entity (between Bharti Telemedia which houses the group’s DTH business and Tata Play), will not have any representation from the Tata group. “The contours are still being worked out and it is possible that there could be an equity deal,” they said. It is expected that there will be significant operational and cost synergies.

Neither Tata Play nor Bharti Airtel responded to an email from Business Today seeking comment on the issue.
In December 2022, Tata Play made a confidential IPO filing with SEBI. That plan was later abandoned. In the case of Bharti Telemedia, (a subsidiary of Bharti Airtel), a report published by Crisil Ratings last July says that the business had a revenue of Rs 3,045 crore with a loss of Rs 76 crore.

The overall history of DTH has not been easy when it comes to getting new subscribers. Data released by the Telecom Regulatory Authority of India (TRAI) shows that overall numbers fell from 62.17 million in June 2024 to 59.91 million in September 2024. Compare that to 64.18 million for September 2023, with the market clearly dominated by Tata Play with a share of 31.99 percent and 29.38 percent for Airtel. Dish TV accounts for close to 20 percent, while Sun Direct follows at 19 percent. The challenging business scenario has been attributed to more subscribers taking the OTT route to consume content, a trend that is becoming very marked in a 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 the Tatas, who sold their mobile business, Tata Teleservices to Bharti Airtel in 2017, it will mark an exit from a business that was launched in 2001. In terms of shares, Tata Sons has a 70 percent stake in Tata Play.

Singapore’s Temasek accounted for 10 percent, which was bought by Tata Sons last April (Temasek made this investment in 2007) for about $100 million — more importantly, it lowered Tata Play’s valuation to $ 1 billion, down sharply from $3 billion previously. to the pandemic. The other 20 percent is held by The Walt Disney Company following its acquisition of 21st Century Fox by Rupert Murdoch.