Bharti Airtel-Tata Tele Merger Will Increase Airtel’s Revenue Market Share by 3-5%: Fitch

By October 14th, 2017 AT 1:22 PM

Bharti Airtel and Tata Teleservices deal will be a win-win situation for both sides say industry analysts. The deal will improve the market share of Airtel with no financial burden and minus of any asset, said a report from rating agency Fitch.

“Bharti’s credit profile will improve slightly as it’s paying no consideration for the operations, which it would acquire free of debt…benefits from the additional spectrum, fibre assets and subscribers will more than offset the additional spectrum liabilities,” said the report by Fitch.

Airtel Tata Deal

The rating agency also said that Airtel’s market share revenue will increase by 4-5%, which takes the overall revenue market share to 37-38%. To be noted, the deal between Tata and Airtel is a ‘no cash, no debt basis,’ deal.

In addition, the Tata deal will give 42 million customers of Tata Teleservices to Bharti Airtel along with its spectrum license in 19 of the 22 circles virtually free. Fitch also said that the “deal will help arrest the decline in Bharti’s pretax profit and bolster its 4G spectrum portfolio and network position.”

The Fitch report also said that Airtel’s earnings will be down by at least 5% in FY18, thanks to the intense price competition and lower mobile termination rates, but the earnings will improve in FY18 with a growth of 3-5%.

As said earlier, Tata’s 42 million subscribers will be added to Bharti Airtel subscriber base, which takes the overall customer base of Airtel to more than 300 million. Also, Airtel will gain about 178.5 MHz of spectrum in the 850MHz, 1800MHz and 2100MHz bands in 17 the telecom coverage areas. That said, Airtel will only be able to take over a small part of Tata Tele’s spectrum of worth USD 1.5 billion.

“Bharti will take over only a small part of Tata Tele’s deferred spectrum liabilities of USD 1.5 billion. We do not expect the transaction to result in any other increase in debt at Bharti,” the Fitch report said.

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Kaushik
Kaushik

For interested people: Read the IEEE paper “Assessing VoLTE Performances for Fundamental E-UTRAN Technologies” with ALL References contained inside it – a narrowband carrier does lead to a QoS loss on VoLTE. If Chetan is right and VoLTE will be over a 3 MHz carrier for Airtel, we can assume Jio will win the 4G voice wars, unless Voda-Idea combine come up with something. So much for “proving me wrong”……I wish TT readers understand that there are engineers who work for money and there are scientists who are in it for science and reading the science every day. Electronics is… Read more »

Nikhil
Nikhil

Thanks!!!!! That’s why I am holding on Idea!!!!! Airtel is pathetic of all time from service to customer care!!!!!

Kaushik
Kaushik

Airtel is not pathetic in terms of customer service, just extremely SLOW. They take ages to solve issues. Last week’s issue was solved today after a LOT of goading to Airtel customer care…..I am strongly inclined to port to Idea as a result of this.

Kaushik
Kaushik

Those who want to know about why having 5 MHz carrier is a good thing should go over to IEEE and read the paper on “Assessing VoLTE Performances for Fundamental E-UTRAN technologies” and also read ALL the references contained therein. That will be enough for people to understand why it’s important to have a 5 MHz carrier (at least) for LTE, and the more the better. To compromise on that is to reduce your quality, and it is not expected from Airtel TBH. If Airtel is going to implement VoLTE over 1.4 or 3 MHz carrier as said by Chetan,… Read more »

Sanjeet
Sanjeet

Absolutely true, thats why most electronic engineers are employed in IT sector.

Chetan
Chetan

Volte can work on 3mhz minimum. Don’t go into papers and start telling us how much is required for good quality volte. Volte works on data packets and not frequency. Indian operators if thought of quality then would have bought 20mhz of band 3 , and Jio would have been allowed to buy 10 mhz of band 5. Regulations are tough nut in India. Jitna hai ussi mein kaam chalao. But I am not ruling out Airtel buying another 2.5 mhz pan India of band 5 but it all depends of band pricing on next auction. Buying pan India at… Read more »

Kaushik
Kaushik

I wish you had been this civil to me in the last discussion instead of unnecessary insults like buffoon and duffer and brandishing some ECE degree. Now I can sense you are calmed down. Yes it makes sense IF Airtel can buy another 2.5 MHz. And yes VoLTE can work on 3 MHz but again, as the paper states – packets or circuits are not so relevant except in terms of capacity – because ultimately you are transmitting the same as EM waves anyhow. The problems with narrowband carriers are again exemplified by a higher packet loss and transmission delay… Read more »

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