Bharti Airtel confirm talks with Tata Group to merge their DTH segments

Bharti Airtel confirmed “bilateral discussions” with Tata Group for a possible merger of their direct-to-home (DTH) segments, Bharti Telemedia and Tata Play, on Wednesday.

 

“We wish to submit that Bharti Airtel and Tata Group are in bilateral discussions to explore a potential transaction to achieve a combination of Tata Group’s DTH business housed under Tata Play with Bharti Telemedia, a subsidiary of Airtel, in a structure acceptable to all parties,” Bharti Airtel said in a stock exchange filing.

 

Emails sent to Bharti Airtel and Tata Play regarding the possible structure of the merged entity did not elicit a response.

 

 

This comes as India’s DTH industry struggles to retain its subscriber base, with a decline in revenue due to a shift in consumer preferences towards more flexible digital content options.

 

Analysts collectively believe that consolidation is the only way forward for the DTH industry.

 

“I think it’s high time consolidation happens because the industry is struggling with a shrinking number of users on the DTH platform,” said a media consultant.

 

The total active subscriber base decreased from 62.17 million in June 2024 to 59.91 million in September 2024, according to the latest Telecom Regulatory Authority of India Performance Indicators Reports.

 

However, Bharti Telemedia’s Airtel Digital TV is the only DTH operator that has seen a rise in its subscriber base.

 

“In DTH, we added 29,000 customers in the quarter,” said Gopal Vittal, vice-chairman and managing director of Bharti Airtel, in a recent earnings call. “Our focus on a simplified pricing structure, strong content offering, and convergence has led to consistent share gains.”

 

The media consultant quoted earlier on added that while the merged entity will be large, it won’t affect other players like Dish TV and regional operators in the short run.

 

“If they both come together, they can invest in building fibre infrastructure, last-mile set-top boxes, or develop something interesting for consumers to bring them back onto their platform,” the consultant added.

 

“It is important to note that both Tata Play and Airtel Digital TV are key competitors in the DTH market. Given the sizeable aggregate market share that would result from the merger, the Competition Commission of India, according to its decisional practice, is likely to approve the proposed merger with remedies that could be structural and/or behavioural,” said G R Bhatia, partner at Luthra and Luthra. “These may include requirements to divest some assets or business segments or impose measures such as price caps or service commitments to maintain competition in the market.”

 

He added, “The parties to the merger will, however, continue to contend that even after the merger, the resulting entity is unlikely to exert dominance in the market, as over-the-top platforms will continue to exert competitive pressure on the DTH service sector. That said, for now, it is a wait-and-watch scenario.”

 

An industry expert said that if the merger goes through, Tata Play would most likely come under Airtel Digital TV’s business structure, and the merged entity would be rebranded.