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Airtel gets approval to offload 15% stake in DTH arm to Warburg Pincus

Bharti Airtel’s DTH arm Bharti Telemedia has received an approval from the Ministry of Information and Broadcasting to transfer its 15% stake to private equity firm Warburg Pincus, the company said in a regulatory filing.

This is in accordance with the deal announced in December last year, under which Bharti Airtel would sell a 15% stake in Bharti Telemedia, while another 5% would be sold by another Bharti entity. While Airtel didn’t disclose any details on the aforementioned 5%, media reports claimed that the entire deal has received an approval from the concerned authorities.

MediaNama has reached out to Airtel for a clarification and will update this when we hear from them.

It is important to note here that DTH was among Airtel’s very few profitable businesses during the quarter ending June 30, 2018 (Q1 FY19). It had a subscriber base of 14.65 million users at the end of the quarter, which represents a growth of 10.0%, as compared to the corresponding quarter last year, the company said in its quarterly results. Airtel’s DTH business had presence in 639 districts across the country.

DTH market set to be disrupted?

Most market analysts are wary of Airtel’s success in the DTH business going forward, as they expect Reliance’s JioGigaFiber to disrupt the home broadband and DTH markets just like Jio disrupted the telecom industry in 2016. Jio will offer a set top box for TV when it launches ultra high speed fibre broadband services.

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While Jio has not yet announced any tariffs or plans for its TV service yet, most people are certain that its pricing would be extremely aggressive and consequently, put a lot of pressure on the incumbents to match the tariffs or risk lose market share. This is highly similar to what happened in the telecom industry following Jio’s foray in 2016.

Moreover, DTH operators are already under pressure from app based streaming services which have weighed heavily on their bottom lines. Therefore, it will be interesting to see how Airtel’s DTH segment performs in the coming days.

Airtel’s recent developments:

  • Airtel recently announced a carrier billing deal with Netflix.
  • It created a separate B2B company to develop optical fibre cable infrastructure and lease it out to other telcos.
  • Zee Entertainment Enterprises entered into a content sharing partnership with Bharti Airtel. Over the next three years, ZEEL and Airtel will work on creating exclusive video content for Airtel’s video-on-demand app Airtel TV and ZEEL’s streaming service ZEE5.
  • Last month, Bharti Airtel was talking to Warburg Pincus to raise up to $ 1.5 billion by selling as much as 15% of Bharti Airtel International, its holding company for African operations.
  • In June, Bharti Airtel’s video-on-demand streaming app Airtel TV crossed 50 million downloads on Android.

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