Airtel confirms talks with Tata Group on merger of DTH business

Airtel, Tata

Bharti Airtel has confirmed that it is in talks with the Tata Group to explore a deal to merge Tata Play's direct-to-home (DTH) business with its subsidiary Bharti Telemedia Ltd.

"The above is at a discussion stage only," the telecom operator said in an exchange filing on February 26, a day after a report said Tata Play and Airtel Digital TV were heading towards a merger.

The Economic Times reported that the deal would likely be through a merger swap, with Airtel holding over 50 percent stake in the merged entity. The merger will help Airtel grow its revenue in the non-mobile segment.

The report also said the merger would help Airtel gain access to nearly 20 million homes via Tata Play's connections. It would lead to service providers clubbing broadband, telecom and DTH plans into a single subscription. The deal would be the second high-stakes agreement in the space after the 2016 merger of Videocon d2h and Dish TV.

The merged entity would likely to be run by the senior management of Airtel, the report said. Tata would hold two board seats under the non-binding agreement. The operations of the merged entity were reportedly being valued at around Rs 7,000 crore. Disney would continue to own shares in the combined entity.

Tata Sky began its services in 2004 as a joint venture between Tata Sons and Rupert Murdoch's 21st Century Fox. In March 2019, the Walt Disney Company purchased 21st Century Fox's stake in the company. The DTH provider was rechristened as Tata Play in 2022.