Sunil Mittal-led Bharti Enterprises has reportedly opted out of mega-alliance talks with the Tata Group for their telecom, overseas cable and enterprise services, and DTH business. Notably, the alliance talks gathered momentum after N Chandrasekaran took charge as Chairman of Tata Sons in February.
According to an ET report, Bharti Enterprises will now focus on strengthening its books via a strategic stake sale in its tower company Bharti Infratel and Airtel’s complete acquisitions of Telenor India and Tikona’s 4G business. The company had a debt of Rs 87,840 crores at the end of June.
The report said that SingTel or Singapore Telecommunications Ltd owns over a third of Bharti Airtel, wanted to just buy the enterprise business of Tata Teleservices and Tata Communications. However, it later realised that such as move would take away Airtel’s core focus, given that the Telco has its own business enterprise.
Further, Bharti Airtel also has a strong DTH business, which competes with Tata Sky. A merger would have dominated the space, pipping Dish TV-Videocon, which is set to become the market leader after their merger takes effect.
SingTel didn’t want the complexities of the proposed buyout of Tata Teleservices, which has over the $4.5-billion debt on its books. Besides, Bharti Airtel would have had to pay close to $1.7 billion to acquire Tata Teleservices spectrum and use them for 4G services.
“The Tatas are desperately seeking an out-of-the-box solution for their larger telecom and media piece. After Bharti, it has to seek out others with similar aspirations like Reliance Jio,” a person was quoted as saying.
The report stated that Airtel was looking to close the gap with the proposed Vodafone-Idea Cellular combine, which will become the largest telco by subscribers and revenue upon merger completion.