Bharti Airtel’s aggressive expansion into next-generation content delivery platforms such as 5G-based Fixed Wireless Access (FWA), high-speed fibre broadband, and Internet Protocol Television (IPTV) has significantly weakened the business case for consolidating traditional direct-to-home (DTH) services. Tata Group is set to renew its efforts to divest Tata Play, its direct-to-home (DTH) television business, after merger talks with Bharti Airtel fell through over valuation disagreements, ETTelecom reported, citing sources familiar with the matter.
Airtel’s recent IPTV rollouts across over 2,000 cities and nationwide investments in 5G and fibre networks are believed to have played a key role in its decision to walk away from merger talks with Tata Group’s DTH arm, Tata Play. The two companies ended negotiations earlier this month after failing to agree on the valuation of Tata Play, with sources citing a Rs 2,000 crore gap between their respective assessments.
Valuation Disagreement
“The Tata Group reckoned it has a strong brand in Tata Play, which is India’s largest DTH services player, and merited a higher valuation,” said one of the persons cited above, according to the report.
Tata Sons, which views the DTH business as non-strategic and lacking scalability, had been pushing for a deal that reflected Tata Play’s market leadership and strong brand equity. Tata Play is India’s largest DTH player with over 23 million subscribers. The group had acquired Temasek Holdings’ 10 percent stake in the company for Rs 835 crore in April 2024, valuing Tata Play at approximately USD 1 billion, according to previous reports.
Tata Group was seeking a valuation of Rs 7,000 crore, arguing that Tata Play’s 23 million-strong subscriber base and brand leadership warranted a premium. Airtel, however, reportedly valued the asset at under Rs 5,000 crore, viewing satellite-based DTH services as increasingly obsolete amid a consumer shift toward digital and streaming platforms.
“Airtel is also believed to have walked away from the DTH merger deal as it has recently rolled out internet-based IPTV services-seen as an emerging opportunity for converting its 120 million-odd cable TV households, most of whom are still to subscribe to streaming services. Airtel as a 5G mobile operator is also investing heavily in 5G-based fixed wireless access (FWA) services and in high-speed fibre broadband rollouts, which would allow it to offer live streaming services on digital platforms,” the report quoted the source as saying.
“But Airtel also possibly didn’t see much value in merging Bharti Telemedia with Tata Play, given its focus on FWA and access to high-speed fibre broadband networks, which enables it to offer the gamut of video and live streaming services on digital platforms and reduces its dependence on linear pay TV platforms,” Rohan Dhamija, head of Analysys Mason India and Middle East, was quoted as saying in the report.
He also added that Airtel’s recent launch of IPTV services across 2,000 cities would further reduce its dependence on pay TV platforms.
IPTV, on Internet Protocol Television, is a method of delivering TV content over the internet-also seen as an alternative to mainline cable or satellite TV. TelecomTalk previously covered first impressions of the Airtel IPTV service from an end user, which can be read in the linked story.
“The compulsion to exit the DTH business was more in case of the Tatas, while Airtel was merely weighing the pros and cons of merging the DTH businesses, and it ultimately didn’t make the cut as DTH is not a core business for Bharti, and as a leading telco with access to a countrywide fibre broadband network and now IPTV services, it is better positioned to dominate the OTT (over the top) aggregation space via its scale and ability to bundle data with content,” a second person said, as mentioned in the report.
While the merger would have marked a rare consolidation in the DTH space—following the Dish TV–Videocon d2h merger in 2016—it ultimately failed to align with Airtel’s evolving strategy.
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