Tata Teleservices to merge consumer mobile biz with Airtel

Tata Group and India's largest telecommunication service provider, Bharti Airtel on Friday announced the signing of an agreement to merge the consumer mobile businesses of Tata Teleservices and Tata Teleservices Maharashtra into Bharti Airtel.

Tata Group said in a release that Bharti Airtel will absorb Tata Tele's operations across the country in 19 circles representing bulk of India's population and customer base.

The proposed merger will include transfer of all the customers and assets of Tata consumer mobile business to Bharti Airtel, further expanding Bharti Airtel's overall customer base and network. The merger will be done on a debt-free, cash-free basis, except for Bharti Airtel assuming a small portion of the unpaid spectrum liability of Tata towards the DoT, which will be paid on a deferred basis.

The acquisition will enable Airtel to close the gap with Idea-Vodafone combined - both in terms of number of subscribers as well as revenue market share whereas, for the Tata Group, the telecom business was a huge liability with a debt of Rs. 31,000 crore and a considerable interest outgoing.

At 10:49 am, Bharti Airtel was trading at Rs. 426.8, down by Rs 26.80 or 6.71 per cent on BSE, while Tata Teleservices (Maharashtra) Limited was trading at Rs. 4.80, up by Rs. 0.40 or 9.09 per cent.