Airtel-Tata Play Deal: Bharti Airtel is reportedly in talks with Tata Group to acquire Tata Play, India’s largest direct-to-home (DTH) business. This move by Airtel is aimed at strengthening the company’s position in the digital TV segment, which has been facing continuous losses. Even before this, a deal has been signed between Tata Group and Bharti Airtel. This deal was done in the year 2017, in which Airtel bought Tata’s consumer mobility business.
TOI quotes an Economic Times report as saying that Bharti Airtel is in advanced talks with Tata Group to buy Tata Play, India’s largest direct-to-home (DTH) business that is loss-making.
Why is Airtel betting on a loss making company?
Consumers in Tier 1 and Tier 2 cities are upgrading from DTH to OTT packs on home broadband and are cutting cable connections and moving to cheaper online options. On the other hand, consumers in villages and small towns are increasingly liking Doordarshan’s free dish. Sources with knowledge of the matter said that the talks that have been going on for the last several weeks have gained momentum and a formal announcement is expected soon. However, Tata Sons has not commented on this.
“The group had bet on Tata Play’s growth and saw strategic value in it until the market momentum changed,” said an official familiar with the matter. The group has clarified that in any market, it must have a strong and massive position. Tata Play fits well into Airtel’s strategic plans and its consumer offering portfolio.”
Tata Sons currently holds 70% stake in Tata Play.
Tata Sons, the holding company of Tata Group, currently holds 70% of Tata Play. In April, Tata Sons had bought 10% stake in Singapore investment firm Temasek Holding Pte for Rs 835 crore. This increased the company’s valuation to $1 billion. Walt Disney owns 30 percent of the company.
What will be the benefit to Airtel?
Airtel will have many benefits by acquiring Tata Play. This will create a larger customer base and make it easier to reach premium customers. It will also strengthen its ability to compete with Jio’s attractive offers. Additionally, it will enable Airtel to provide bundled services like broadband and DTH to its customers. The possible acquisition of Tata Play by Bharti Airtel could have a significant impact on the Indian DTH market. This could lead to increased consolidation between companies, as well as competition in the digital TV and broadband sector.
