Uncertainties cloud Tata group, Bharti Airtel alliance, says report

Amid reports of a mega alliance between Tata group and Bharti Airtel involving their telecom, overseas cable, enterprise services and DTH businesses, there are a lot of issues that may have to be addressed.

According to a report by Bank of America Merrill Lynch, uncertainties remain on a host of issues. First, will Bharti take on Tata’s $4.5-billion debt? 

Second, what will happen to government’s 26 per cent stake in Tata Communications? Lastly, delisting of Tata Communications.

The report said Bharti would have a market share of 40 per cent in the cellular space if the deal went through.  

“We know that historically Bharti’s acquisition track record in Indian cellular business with Aircel 4G spectrum, Videocon, Telenor, etc, has been disciplined,” the report said.

It, however, said a possible deal would be positive for Bharti, subject to the contours of the deal.

“We would also consider this potential merger to be positive for Dish TV, as competition will reduce. We also consider this to be eventually positive for Tata Communications due to market consolidation,” it added.