Beleaguered TATA Telecom may see a possible merger with Bharti Airtel as talks between both the companies are going from six months. TATA Sky wants to do away with the losses and Airtel Digital TV wants to fill up the gap.
A Deal that can benefit both the parties
For TATA, the Telecom business hasn’t really paid off well as they have a debt of rupees 31, 000 crores and an every year loss of 3400 crore rupees. The reason is valid to do away with telecom business but who is going to buy? The earlier talks between TATA and Vodafone didn’t paid off well as Vodafone asked Tata to clear up its dues. Now Bharti Group has shown genuine interest in the assets of Tata which may benefit its telecom business that has seen a setback since the launch of Jio.
In order to make the deal more lucrative, Tata added its DTH service known as Tata Sky as well in the deal. Bharti Group already has its own DTH service and gifting Tata Sky which has huge customer base may boost its DTH business. The collaboration of Vodafone and Idea and the launch of Reliance Jio has certainly created a trouble for Bharti Airtel as it has to survive on its own.
What Bharti Group will benefit from the deal?
Tata Telecom has lucrative properties despite of a sinking business. The 800 MHz spectrum, towers, sea cables and active 45 million subscribers will definitely boost the Airtel telecom business as it needed something to fill up the gap caused by Voda-Idea merger and launch of Jio. Apart from adding sweet to the deal by offering Tata Sky service, Tata group was in fear of further setbacks as Reliance Jio is very soon going to launch its DTH service.
The adding up of DTH service may help the Bharti group to enhance its DTH service as reliance Jio is the potential threat to these services. Reliance Jio’s attractive and cheap offers have near about ruined the telecom industry since last year and now DTH launch may cause potential damage to the DTH industry. That is why we are witnessing such secret deals in order to minimize the expected loss.