- The merger negotiations were halted because of the AGR issue
- Dish TV will retain some of its businesses
- Warburg Pincus will remain invested in Airtel Digital TV
There have been lots of ups and downs in the DTH industry in the past few months, but one thing that was awaited in the DTH industry was how the biggest DTH operator of the country would be formed. Now, here we are not talking about the rise of Tata Sky, but of the soon to be merged entity of Airtel Digital TV and Dish TV. The two DTH operators have been in negotiations about merging their operations but were unable to land to an agreement. However, now as per a new ET report, Warburg Pincus, the investment firm, Dish TV promoters and Airtel Digital TV have come to an agreement about the merger of the two companies. As per the structure of the deal, the operations of Dish TV will be hived off and merged with Airtel Digital TV. Currently, the detailed information about the merger like shareholding information or other financial details have not been shared by the companies. It is worth noting that Dish TV will be merging into Bharti Telemedia which holds Airtel Digital TV under its umbrella.
Dish TV and Airtel Digital TV Merger Talks Now Resume
One of the persons related to the matter spoke on this issue, “The final scheme of arrangement and other details are being worked on.” Also, according to this person, Warburg Pincus, which had invested in 20% of Bharti Telemedia for $350 million back in 2017, will remain invested in the company even after the merger. Another person aware of the ongoings remarked that following the merger of the companies, Bharti Telemedia could also hold an IPO to be listed on the stock market. He also added that back in September, the companies had almost reached an agreement on the pricing of the shares on which Dish TV was ready to sell its business, but the Supreme Court verdict had halted these talks, thus putting a pause on the merger proceedings. But, now the talks are on again.
The Supreme Court decision on the issue of Adjusted Gross Revenue (AGR) had ordered telecom operators to pay upwards of Rs 1.47 lakh crore in total in the name of license fees, spectrum usage charges, interests and other penalties, in which Bharti Airtel also has to pay a large chunk. This decision, which was passed in October, had struck a hurdle in the talks of the merger earlier.
Dish TV to Hold On to Some Businesses
It is worth noting that right now, Dish TV remains a listed company, and after the merger, it will continue to offer its other services which includes Dish Infra Services (infra support business). Not only this, but the company owns 51% in C&S Medianet, which is a distribution consultancy joint venture in partnership with cable TV service provider Siti Networks. The promoters of the company currently occupy a 55.27% stake in Dish TV.
Merged Company to Make Largest DTH Entity
When posed with questions from ET, Warburg Pincus did not respond to any queries. Further, Dish TV said that the company would refrain from responding to market speculation. To recall, the first move in the Dish TV and Airtel Digital TV merger was made by Sunil Bharti Mittal, the chairman of Bharti Group which holds Bharti Telemedia, and one of the largest telcos of India. This move was made, after the Mukesh Ambani led telecom operator, Reliance Jio had bought a controlling stake in major cable TV firms like DEN Networks and Hathway.
It is crucial to note that when these two companies merge their operations, they will create the largest DTH entity in India with about 62% market share and 40 million DTH subscribers. It would dethrone the current market leader in the DTH industry, Tata Sky.
Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.