Talks between Bharti Airtel to acquire Tata Play have now reached an advanced stage. The combined entity will account for more than 38 million direct-to-home (DTH) subscribers, or more than 60 percent of the market, making it the largest player.
It has been coming together for a while now, and the Tatas are looking to get out of the business. At the consolidated level (DTH and broadband together), for FY24, its total revenue was Rs 4,327 crore, a slight decline from Rs 4,530 crore for the previous fiscal. However, its loss widened from Rs 102 crore to Rs 433 crore or more than 4X.
People familiar with the deal told Business Today that the new resulting merged entity (between the group's DTH business and Bharti Telemedia, which runs Tata Play) will have no representation from the Tata group. “The contours are still being worked out and it could be a partial arrangement,” they said. It is expected that there will be significant operational and cost synergies.
Neither Tata Play nor Bharti Airtel responded to an email seeking comment on the issue from Business Today.
In December 2022, Tata Play made a confidential IPO filing with SEBI. That plan was later abandoned. In the case of Bharti Telemedia, (a subsidiary of Bharti Airtel), a report by Crisil Ratings last July stated that the business posted a revenue of Rs 3,045 crore with a loss of Rs 76 crore.
The whole DTH story has not been easy when it comes to getting new subscribers. Data released by the Telecom Regulatory Authority of India (TRAI) shows that overall numbers have fallen from 62.17 million in June 2024 to 59.91 million by September 2024. Compare that with 64.18 million for September 2023, the market is clearly dominated by Tata Play. 31.99 percent and 29.38 percent share for Airtel. Dish TV is close at 20 percent followed by Sun Direct at 19 percent. The challenging business situation is due to more subscribers going the OTT route for content consumption, a very noticeable trend in a post-pandemic world.
From a strategic point of view, the deal is expected to help Airtel strengthen its presence in the digital television space. For the Tatas, which sold its mobile business Tata Teleservices to Bharti Airtel in 2017, it will mark a departure from a business launched in 2001. In terms of shareholding, Tata Sons owns 70 percent stake in Tata Play.
Tata Sons bought 10 percent of Singapore's Temasek last April (Temasek made the investment in 2007) for about $100 million—significantly, which brought down Tata Play's valuation to $1 billion, down from $1 billion earlier. A sharp decline from 3 billion. to the plague. The Walt Disney Company owns the remaining 20 percent after Rupert Murdoch's acquisition of 21st Century Fox.