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

Published by
Rudradeep Biswas

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.


“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.

However, a top industry analyst told ToI that there is a little business sense for Airtel to buy the loss-making Tata Tele. “The only reason for Airtel to consider a deal with the Tatas will be to maintain leadership in revenue market share. The deal between Vodafone and Idea threatens to take Airtel’s leadership here, and thus Sunil Mittal may counter this through such deals if they come at an attractive price,” he was quoted was saying.

Tata Tele has revenues of around Rs 9,500 crore. The telco’s loss widened to Rs 4,617 crore for FY17, from a loss of Rs 2,023 crore the year before. The telco’s net worth eroded by Rs 11,653 crore at the end of the financial year ended March 2017. Tata Tele recently approached its lenders, including the State Bank of India (SBI), to seek a restructuring of its debt, becoming the second telco to seek debt restructuring after Anil Ambani-owned Reliance Communications (RCom). The telco wants bankers to restructure about Rs 30,000-crore of its total Rs 40,000-crore debt, which includes Rs 8,000-crore of deferred spectrum payments.

According to the CCS Insight report, Mukesh Ambani-led Jio’s impact on other mobile operators has been startling, with its assertive moves since launch doing little to subdue the chaos of the Indian market.

Rudradeep Biswas

Published by
Rudradeep Biswas

Recent Posts

Streaming Services Where You May View 2023 Oscar-Winning Films

Once again, it's Oscar season, when we honour the year's best films. We have many…

Netflix to Bring 40 New Game Titles this Year

Netflix, the online streaming giant, is going to bring 40 new game titles for users…

SES Launches Final Satellites as Part of C-Band Transition Plan

SES has announced the successful launch of two American-made Satellites, SES-18 and SES-19 satellites, designed…

Du and Omantel Launch OEG Subsea Cable Project

Dubai's Du from Emirates Integrated Telecommunications Company (EITC) and Oman's Omantel have announced the launch…

BSNL Revenue Targets Elevated by Central Govt

BSNL is expected to turn profitable by FY27, says the government. Now, compared to the…

DoT Block Lost or Stolen Mobile Service Now Live for All Users in India

The Department of Telecommunications (DoT) launched the Central Equipment Identity Registry (CEIR) that connects to…

Etisalat by e& and Cyberint Partner to Enhance Cyber Security

Etisalat by e&, the UAE telecom brand of e&, and Cyberint announced a partnership to…

India’s 5G Rollout is Super Impressive

India’s 5G rollout is super impressive because of many reasons. 5G started rolling out in…

Ziply Fiber Continues Rapid Fiber Expansion; To Acquire Ptera

Ziply Fiber announced its next expansion and began the construction of a new ultra-high-speed fiber…