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Tata Teleservices to merge its Consumer Mobile Business into Airtel

Bharti Airtel and the Tata Group have entered into an agreement to merge the Consumer Mobile Businesses (CMB) of Tata Teleservices Limited (TTSL) and Tata Teleservices Maharashtra Limited (TTML) into Airtel, the company informed the BSE. TTSL and TTML’s operations, across the nineteen circles (17 under TTSL and 2 under TTML) it is present in, will be absorbed by Airtel. The deal is subject to the necessary regulatory approvals.

This merger will be carried out on a debt-free cash-free basis, with one exception: Airtel will have to pay a part of Tata’s unpaid spectrum liability to the Department of Telecom (DoT), on a deferred basis. The current employees of TTSL and TTML will be demerged across the CMB business and the EFL (Enterprise and Fixed Line and Broadband) business, and are expected to be moved within the Tata Group at a later date.

As per the deal, all customers and assets of Tata CMB will be transferred to Airtel, and it also means that Airtel’s current spectrum holdings will get a significant push: addition of 178.5 MHz spectrum (of which 71.3 MHz is liberalized) across the 850, 1800 and 2100 MHz bands. Airtel will also get an indefeasible right to use (IRU) a part of Tata’s existing fibre network.

As of March 31, 2017, TTML had 551,983 wireline subscribers and 2.59 million mobile subscribers in the Mumbai circle, and 309,408 wireline subscribers and 4.68 million mobile subscribers in the Maharashtra circle.

Tata Teleservices will continue operation as usual till the transaction is completed. Following which, Tata Teleservices customers will get access to the mobile banking and VAS services provided by Airtel, besides being ported onto Airtel’s network.

Note that Tata will retain its stake in the telecom infrastructure company Viom Networks, which is a joint venture between Tata Teleservices and SREI Infrastructure. It already works with most leading telcos in the country, including Airtel, Aircel, MTS, Vodafone, Idea, Uninor and BSNL among others, besides Tata Teleservices. Also, the company has mentioned that it is exploring possibilities of combining its Enterprise Business with Tata Communications and its Retail Fixed Line and Broadband business with Tata Sky.

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Readers might remember that in February this year, TTSL shareholders had reportedly approved a proposal to raise Rs 10,000 crore by issuing convertible preference shares. The proposal also included increasing the company’s authorized capital to Rs 40,000 crore from the existing Rs 20,000 crore. That obviously didn’t pan out as planned.

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