India's Bharti Airtel to acquire Tata's mobile business for free (updated)

Tata Teleservices (Maharashtra)

12/10/2017 12:24

(Adds details on the deal, background on sector) 
    By Devidutta Tripathy 
    MUMBAI, Oct 12 (Reuters) - Bharti Airtel Ltd  BRTI.NS  is 
acquiring the Tata conglomerate's consumer mobile business, the 
two companies said on Thursday, in a deal that gives India's top 
wireless player a major subscriber base boost for virtually 
free, while stemming the bleed for Tata from a loss making 
venture. 
    The transaction will be done on a "debt-free cash-free" 
basis, the companies said in their joint statement, although 
Bharti Airtel will take over a "small portion" of Tata's unpaid 
spectrum liabilities. 
    Tata Teleservices and its unit Tata Teleservices 
(Maharashtra) Ltd  TTML.NS  have more than 40 million 
subscribers and rank ninth in India's telecoms market, which had 
a total of 1.2 billion mobile subscriptions at the end of July. 
    The Indian telecom sector is in the midst of a wave of 
consolidation after the entry of Reliance Industries'  RELI.NS , 
Reliance Jio Infocomm venture.  
    Reliance Jio, backed by India's richest man Mukesh Ambani, 
has sparked a price war and cut-throat competition in the space, 
eroding profits for carriers at a time when they already have 
high debt levels after costly airwave purchases. 
    As part of the deal, Tata's mobile customers in 19 service 
areas will move to Bharti Airtel along with airwaves that Tata 
had purchased.  
    "Tata and Bharti Airtel will work together to further 
explore other mutual areas of cooperation," the companies said. 
    The statement also said Tata is in the initial stages of 
exploring a combination of its enterprise business with Tata 
Communications Ltd  TATA.NS  and its retail fixed-line and 
broadband business with satellite TV arm Tata Sky.  
    Tata will retain its stake in tower company Viom, and will 
take care of the liabilities associated with it, according to 
the statement. 
    Goldman Sachs advised Tata on the deal. 
 
 (Reporting by Devidutta Tripathy; Editing by Rafel Nam and Euan 
Rocha) 
 ((devidutta.tripathy@thomsonreuters.com; +91 84518 40430; 
Reuters Messaging: 
devidutta.tripathy.thomsonreuters.com@reuters.net)) 
 
Keywords: TATA TELESERV M&A/BHARTI AIRTEL