Airtel May Buy Tata Tele, Jio-RCom Likely to Merge by 2020: Report

India’s top telco Bharti Airtel may acquire ailing telco Tata Teleservices, while Reliance Jio and Reliance Communications are likely to combine their businesses in a longer term, according to a report by London-based CCS Insight. The ongoing and these expected merger and acquisition moves will result in a four-operator market in the next three years, down from 15 licensed providers in 2010, a report in Times of India said.

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“From structuring and approval perspectives, the easiest transaction would be for Tata Teleservices to be subsumed by Bharti Airtel. Our view is that the main alternative is a tie-up with BSNL, but other combinations exist, such as a complex merger with the Reliance Communications-Aircel business,” said the report.

“Given the current state of the market, coupled with the trend toward consolidation, an acquisition by Jio looks inevitable. The newly-merged Reliance Communications-Aircel is the obvious choice. But we are dealing with a complex relationship between two siblings. This emotional factor will be the principal element in any future transaction,” the report said.

The agency, which conducted a survey with 57 telecom M&A influencers, also said that Tata Tele might also alternatively look at merging operations with state-run telco BSNL, providing the latter with a route to privatisation. The alternate move is fairly possible given Tata Group’s history with state-owned telecom companies. For instance, Tata Group’s international voice and data arm, Tata Communications had previously acquired Videsh Sanchar Nigam, which was a state-owned equivalent company.

The agency report said that India would have three private providers each with more than 300 million subscribers and one state-owned operator with over 100 million by 2020.

Bharti Airtel is already in a process to acquire Indian operations of Norway-based Telenor Group and is also buying 4G spectrum and business of Tikona Digital, aimed at strengthening footprint and reach in the market ahead of Vodafone-Idea Cellular merger, which upon completion will create India’s largest telco by dislodging the Sunil Mittal-led telco.