Tata Teleservices and Bharti Airtel agreed to merge consumer telecom business

NEW DELHI, INDIA: Telecommunications services provider, Bharti Airtel and Tata have agreed to merge Consumer Mobile Businesses (CMB) of TTSL and TTML into Bharti Airtel. The proposed merger will include transfer of all the customers and assets of Tata CMB to Bharti.

As part of the Agreement, Bharti Airtel will absorb Tata CMB’s operations across the country in nineteen circles (17 under TTSL and 2 under TTML). These circles represent bulk of India’s population and customer base.

It will also enable Bharti Airtel to further bolster its strong spectrum foot-print with the addition of 178.5 MHz spectrum (of which 71.3 MHz is liberalised) in the 850, 1800, and 2100 MHz bands.

The transaction will also provide Bharti Airtel with an indefeasible right to use (IRU) for part of the existing fibre network of Tata.

Sunil Bharti Mittal, Chairman, Bharti Airtel, said, “This is a significant development towards further consolidation in the Indian mobile industry. 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.”

“The acquisition of additional spectrum made an attractive business proposition. It will further strengthen our already solid portfolio and create substantial long term value for our shareholders given the significant synergies,”added he.

Bharti Airtel will ensure quality services to Tata CMB’s customers, while offering them the added benefits of its innovative product portfolio, access to superior voice and data services, mobile banking, VAS and domestic or international roaming facilities. Tata CMB’s operations and services will continue as normal until the completion of the transaction.

Tata and Bharti Airtel will work together to further explore other mutual areas of cooperation, that will be value accretive for both the Groups.

The merger is being done on a debt-free cash-free basis, except for Bharti Airtel assuming a small portion of the unpaid spectrum liability of Tata’s towards the DoT, which is to be paid on deferred basis.

The employees of Tata will be demerged on the lines of the two businesses i.e. CMB and EFL (Enterprise and Fixed Line and Broadband), and post an optimal manpower planning will be moved accordingly.

Tata is also in initial stages of exploring combination of its Enterprise Business with Tata Communications and its Retail Fixed Line and Broadband business with Tata Sky. Any such transaction will be subject to respective boards and other requisite approvals.

Tata will retain its stake in Viom, and will take care of the liabilities associated with it.

N Chandrasekaran, Chairman, Tata Sons, said, “We believe today's agreement is the best and most optimal solution for the Tata Group and its stakeholders. 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.”