Bharti Airtel buys Tata's consumer mobile business

Bharti Airtel on Thursday entered into an agreement to merge with Consumer Mobile Business (CMB) of Tata Group's two telecom businesses - Tata Teleservices Limited (TTSL) and Tata Teleservices (Maharashtra) (TTML). 

Sunil  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."

Goldman Sachs (India) Securities Private Limited acted as financial advisor to Tata for this deal. 

Under the agreement, Airtel will absorb Tata CMB's operations across the country in nineteen circles - 17 under TTSL and 2 under TTML. 

Proposed merger will  transfer of all the customers and assets of Tata CMB to Bharti Airtel, further augmenting Bharti Airtel’s overall customer base and network. 

This deal will also support Airtel in strengthening its spectrum foot-print with the addition of 178.5 MHz spectrum (of which 71.3 MHz is liberalised) in the 850, 1800 & 2100 MHz bands. 

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

Until the completion of transaction, the Tata CMB's operations and services will continue to function as normal. 

On completion of the deal, employees of Tata - which is CMB and EFL (Enterprise and Fixed Line and Broadband), will be demerged and post an optimal manpower planning will be moved accordingly.

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.

Not only this, both the group's will work together to further explore other mutual areas of cooperation, that will be value accretive for both the Groups.

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."

Furthermore, 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.

The announcement came in as a positive for Tata Teleservices (Maharashtra) as the investors pushed its stock price at an upper circuit, after ending at Rs 4.42 per piece above 9.95%. 

On the other hand, Bharti Airtel closed in negative at Rs 398.70 per piece down by Rs 5 or 1.17%.