Debt-free cash-free basis: Airtel takes over Tata Teleservices

Debt-free cash-free basis: Airtel takes over Tata Teleservices, tfcmedia

Tata Group has agreed to sell its mobile business to Bharti Airtel for free. Bharati Airtel officially announced it mergers its mobile business operations with that of Tata Teleservices. Chairman of Bharati Airtel, Sunil Bharati Mittal said, “The acquisition of additional spectrum made an attractive business proposition. It will further strengthen our solid portfolio and create substantial long-term value for our shareholders given the significant synergies.” He added, This is a significant development towards further consolidation in the Indian mobile industry and reinforces our commitment to lead India’s digital revolution by offering world-class and affordable telecom services through a robust technology and solid spectrum portfolio.” As part of the deal, Tata’s mobile customers in 19 service areas will shift to Bharati Airtel along with airwaves that Tata had purchased.

Commenting on the deal, Chairman of Tata Sons, N Chandrasekaran said, “We believe today’s agreement is the best and most optimal solution for the Tata Group and its stakeholders. Finding the right home for our longstanding customers and our employees, has been the priority for us. We have evaluated multiple options and are pleased to have this agreement with Bharti.” Bharati Airtel believes that this is a significant development towards consolidation in the Indian mobile industry.

Here are few crucial points you need to know.

  • The merger is being done on a debt-free cash-free basis.
  • The proposed merger will include the transfer of all the customers and assets of Tata’s consumer mobile business to Bharti Airtel.
  • It will also enable Bharti Airtel to further bolster its spectrum foot-print with the addition of 178.5 MHz spectrum (of which 71.3 MHz is liberalised) in the 850, 1800 & 2100 MHz bands.
  • Tata’s consumer mobile business operations and services will continue as normal until the completion of the transaction.
  • The transaction will also provide Bharti Airtel with the right to use for part of the existing fibre network of Tata.
  • The deal, subject to regulatory approvals, will see over 4 crore Tata customers join Bharti Airtel.
  • The employees of Tata will be demerged on the lines of the two businesses – consumer mobile business and EFL (Enterprise and Fixed Line and Broadband).
  • Merger to strengthen Airtel’s market share
  • Tata Group is also in initial stages of exploring the combination of its enterprise business with Tata Communications and its retail fixed line and broadband business with Tata Sky. Any such transaction will be subject to respective boards and other requisite approvals.