Bharti Airtel on Tuesday announced that an affiliate of US private equity firm Warburg Pincus will buy up to a 20% stake in the telecom operator’s direct-to-home (DTH) TV arm for $350 million.
Under the deal, Bharti Airtel will sell 15% stake in Bharti Telemedia, while the remaining 5% will be sold by another Bharti entity, the telecom operator said in a statement released to the press.
Viraj Sawhney, managing director of Warburg Pincus India, will join Bharti Telemedia’s board as part of the deal. Once the deal closes, Airtel will own 80% stake in the DTH unit.
Bharti Telemedia, which operates under the brand Airtel TV, has about 14 million subscribers and a revenue of about $550 million in the 12-month period ended Sept. 30.
“Airtel enjoyed a very successful partnership with Warburg Pincus in the past and we are excited to partner with them once again in an attractive and fast-growing space,” Bharti Airtel MD & CEO (India & South Asia) Gopal Vittal said in the statement.
Bharti Telemedia claims to have a sizable distribution infrastructure, with over 1,500 partners and over 1,58,000 recharge outlets in approximately 630 districts of the country.
“The Indian Digital TV market is expanding rapidly and we believe that Airtel DTH is well positioned to capitalise on incremental growth in digitisation and new TV penetration in Tier 3 and 4 towns and rural areas,” said Vishal Mahadevia, MD and co-head of Warburg Pincus India.
There is growing speculation about a potential engagement between Airtel and Tata Group’s DTH operations after their decision to merge telecom businesses, as indicated by this Times of India report.