Under the agreement, Bharti Airtel will acquire Tata Teleservices's consumer mobile business operations across India in 19 circles, boosting its spectrum foot print with the addition of 178.5 MHz spectrum in the 850, 1800 & 2100 MHz bands, said the statement filed with the BSE.
The news of acquisition comes amid media reports that Tata Group is mulling to shut down Tata Teleservices, which would have left its more than 5,000 employees unemployed. Once Vodafone merges with Idea, they will be the leader in the telecom business.
Tata Teleservices will merge with Bharti Airtel as the Tata group firm looks to tide over its financial woes by exiting the mobile telephony business.
Sunil Bharti Mittal, Chairman of Bharti Airtel said in a statement, "The acquisition of additional spectrum made an attractive business proposition". In the consolidation phase, only the biggest telecom companies would be able to survive in the market. Well, that was the first merger in Indian telecom sector, and now today, we are hearing about the second merger in the country, it's between Tata Teleservices and Bharti Airtel (often referred as Airtel).
As of end-March, Tata Teleservices and its unit had combined debt of Rs 34,089 crore ($5.24 billion) excluding sums due to the government for spectrum purchases, according to local ratings agency Crisil, which also said Tata Teleservices' net loss almost doubled in the year to March, to Rs 4,617 crore.
Goldman Sachs (India) Securities Private Limited is financial advisor to Tata. The Boards of Tata Sons, TTSL and TTML, too, have given their approval.
In the span of a year, Reliance Jio has managed to corner 128.58 million customers and become the fourth largest telecom company by market share after Bharti Airtel, Vodafone and Idea Cellular.
The Karbonn A40 Indian phones come with a retail tag of 3,499 rupees, but Bharti Airtel customers can buy them for an upfront payment of 2,899 rupees and receive cashback of 1,500 rupees.
A Bharti Airtel office building is pictured in Gurugram, previously known as Gurgaon, on the outskirts of New Delhi, India April 21, 2016. Having said that, Tata will retain its stake in Viom while taking care of all the liabilities associated with it.
The proposed merger will include transfer of all the customers and assets of Tata CMB to Bharti Airtel, further augmenting Bharti Airtel's overall customer base and network.
Tata Sons Chairman N Chandrasekaran said the agreement is the "best and most optimal solution" for the Tata Group and its stakeholders.