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इंडियन आवाज़     17 Dec 2017 11:36:01      انڈین آواز
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Tata Tele to merge with Bharti Airtel

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AMN

Bharti Airtel Limited (“Bharti Airtel”), India’s largest telecommunications services provider and Tata, India’s leading conglomerate, today announced that they have entered into an understanding (“Agreement”) to merge Consumer Mobile Businesses (CMB) of TTSL and TTML into Bharti Airtel. The acquisition is subject to requisite
regulatory approvals.

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

 

The merger of Tata Tele with Bharti Airtel will create India’s second 300-million-customer-base company, placing next to the largest combine of Vodafone- Idea. Airtel has about 265 million customers in the country and the number will go up to 305 million after adding the 40 million customers of Tata Tele. The new entrant Reliance Jio has fast grown to 130 million customers since its launch last year. The Vodafone-Idea combine has 390 million customers.

After merger Bharti Airtel will get additional spectrum in 1800, 2100 and 850 MHz bands, which are widely used for 4G. In return, Airtel will have to assume only a small portion of the unpaid spectrum liability of Tata. The transaction will also provide Airtel access to Tata’s existing fibre network.

Tata Tele’s debt of Rs 28,800 crore will be settled by Tata group. Tata will retain its stake in Viom and take care of associated liabilities — American Tower Company (ATC) owns 51 per cent stake in Viom while Tata Tele holds 33 per cent and Tata Sons 2 per cent.

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

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.

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

Chairman, Bharti Airtel, said, “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. 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 customers of Tata will be able to enjoy India’s widest and fastest voice & data network, and bouquet of Airtel’s best-in-class products and services.”

“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.”
Bharti Board which met this afternoon has approved this transaction.

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.”

The Boards of Tata Sons, TTSL and TTML have approved this transaction. Goldman Sachs (India) Securities Private Limited is financial advisor to Tata.

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