India’s Bharti Airtel merges with Tata Teleservices

India’s Bharti Airtel merges with Tata Teleservices

India’s Bharti Airtel has sealed another merger in India as the company has combined forces with Tata Teleservices in a new transaction.

The Bharti Airtel-Tata merger is seeing as a debt-free and cash-free merger that will see Bharti takeover the 40 million subscriber base from Tata Teleservices while the latter will pay off the debt.

India is a very competitive mobile market with over 11 operators where the top three players command over 60% of the market.

Late yesterday (Nigerian time, GMT+1), Bharti Aitel alongside Swedish telecom company, Millicom, announced the finalization of their mergers in Ghana to become the third largest carrier in the market.

It was apparent that Tata Teleservices could no longer continue in business as latest disclosure by the company shows that it has been making losses for some time. According to Businesstoday.in, the telecom companies are going through a phase of financial distress as they are also saddled with huge debt raised for financing costly spectrum purchases.

Bharti Airtel chairman Sunil Mittal said, “The acquisition of additional spectrum made an attractive business proposition. It will further strengthen our portfolio and create substantial long term value for our shareholders. On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and strengthen our market position.”

The employees of Tata Services will be separated on the lines of the two businesses-CMB (consumer mobile business) and EFL (Enterprise and Fixed Line and Broadband)-and post an optimal manpower planning will be moved accordingly.

The statement also said Tata is in the initial stages of exploring a combination of its enterprise business with Tata Communications Ltd and its retail fixed-line and broadband business with satellite TV arm Tata Sky. Tata will retain its stake in tower company Viom, and will take care of the liabilities associated with it, according to the statement.

Bharti disclosed in its latest data that it has about 200 million subscribers, the addition of Tata is expected to give it a slightly larger edge in market share.