Bharti Airtel may acquire Tata Play DTH Service to increase its offering

Bharti Airtel is in talks to acquire Tata Play direct to home (DTH) service, which is currently said to be a loss-making business, a report said. This move will reportedly strengthen Airtel’s presence in the digital TV segment, with competition from the likes of D2H, DishTV and others. Notably, this development comes after the Indian telecommunications provider made an early payment of Rs. 8,465 crores ($1.01 billion) to partially pay outstanding spectrum fees from a 2016 auction.

Airtel’s acquisition of Tata Play

According to an Economic Times reportAirtel’s acquisition of Tata Play (formerly known as Tata Sky) comes at a time when the digital TV segment is facing challenges. Sunil Mittal-led Airtel, India’s second-largest telecom operator, is looking to improve its bundling and increase its non-mobile revenue through this convergence, the report added, citing people familiar with the matter.

Tata Play is India’s largest DTH company, with a reported market share of 33 percent in the first half of last year. according to to market analysis agency Statista.

Tata Sons is the holding company of the DTH service, while the Walt Disney Company also owns 30 percent of it. Before the Covid-19 pandemic, Tata Play was valued at $3 billion (approximately Rs. 25,000 crore). However, its valuation has suffered and is currently estimated at around $1 billion (Rs. 8,395 crore).

Notably, Singaporean investment firm Temasek Holding Pte also had a 10 percent stake in the company, but was bought out by Tata Sons in April this year for a reported $100 million (Rs. 800 crore). According to the report, Bharti Airtel’s deal is expected to have a similar valuation. If the move materializes, it would be the second between the two companies, following Airtel’s acquisition of Tata’s consumer mobility business in 2017, which also reportedly suffered losses.