Loss-making Tata Teleservices to merge with Bharti Airtel Ltd

Mumbai: In a relief to Tata Group’s loss-making telecom business, Bharti Airtel will be absorbing Tata Tele’s Consumer Mobile Business’s (Tata CMB) operations across the country in 19 circles.

Bharti Airtel, which will be taking on Tata’s Rs 10,000 crore spectrum liability, said the merger will bolster its spectrum in 1800, 2100 & 850 MHz bands, all widely used for 4G.

“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,” said Sunil Mittal, chairman of Bharti Airtel.

Tata will retain its stake in Viom and take care of associated liabilities.

The merger will be carried out on a debt-free, cash-free basis. "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," said Tata Sons chairman, N Chandrasekaran.

Experts concluded that this could herald a “larger strategic alliance” between the two companies, involving telecom, overseas cable and enterprise services, and direct-to-home TV businesses, reported the Economic Times. 

Earlier in the week, Chandrasekaran had said that Tata Teleservices was in a really “bad shape” and in a debt of Rs 31,000 crore. “Tata Teleservices...is in a really bad shape. They have a huge debt. The footprint we have and the spectrum we have is very difficult...close to impossible for us to recover. So that is a company we are going to find a solution very quickly," he had said.