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Posted at: Oct 13, 2017, 12:53 AM; last updated: Oct 13, 2017, 12:53 AM (IST)

Airtel to take over Tatas’ mobile biz

Airtel to take over Tatas’ mobile biz
Sunil Mittal, Chairman, Bharti Airtel

New Delhi, October 12

Bharti Airtel will acquire Tata Group’s loss-making mobile telephony business, almost for free, boosting its spectrum holding and raising subscriber base while saving the Tatas from the prospect of having to shut down the struggling unit.

Airtel, for whom it will be the 7th acquisition in five years, will from November 1 take over four crore customers of Tata Teleservices Ltd (TTSL) and Tata Teleservices Maharashtra Ltd (TTML) in 19 telecom circles or zones on “a debt-free cash-free basis”, the two groups announced in separate but identical press statements.

TTSL and TTML employees in the 19 circles, managing the consumer mobile business, along with 178.5 MHz of spectrum across 800, 1800, 2100 Mhz (3G, 4G) bands would be transferred to Airtel.

While all of the Rs 31,000-crore debt will remain with the Tatas, Airtel will assume payment of close to 20% of the Rs 9,000-10,000 crore deferred payments for the spectrum to the government. Tatas will pay the rest.

With this deal, Airtel will have over 32 crore customers, way below 40 crore users with the merged Vodafone-Idea entity.

“Instead of closing down the consumer mobile business, which would have entailed a much higher cost and involved letting go of employees and vendors etc, we have chosen this route,” Tata Group CFO Saurabh Agrawal said.

He said Tatas will retain stake in the tower company, Viom, and explore transferring the enterprise business to Tata Communications and retail fixed-line and broadband business to satellite TV arm Tata Sky.

The Board of the two firms will evaluate the opportunity and decide in 4-6 weeks, he said.

Without giving the exact number of employees being transferred to Airtel, he admitted that the Sunil Bharti Mittal firm may look at optimisation of staff on ground after the merger.

“The merger is being done on a debt-free cash-free basis, except for Bharti Airtel assuming a small portion of the unpaid spectrum liability of Tata’s towards the Department of Telecom, which is to be paid on deferred basis,” the statements said.

Airtel will also have an “indefeasible” right to use for part of the existing fibre network of Tata, TTSL and TSML’s consumer mobile business operations and services will continue as normal until the completion of the transaction. — PTI


‘No-debt, no-cash’ deal

  • Over four crore customers of Tata Tele to join Airtel network from November 1
  • All past liabilities and dues of Tata Teleservices will be settled by Tatas
  • Airtel will assume a small portion of the unpaid spectrum liability of Tatas
  • Merger to bolster Airtel’s pre-eminent spectrum pool with significant additional spectrum in 1800, 2100 & 850 MHz bands
  • Transaction will also provide Bharti Airtel right to use Tatas’ existing fibre network

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