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Bharti Airtel Slips After DoT Approves Merger With Tata Teleservices

By Staff
|

On Friday, shares of Bharti Airtel declined by as much as 1.45 percent to Rs 538.25 on NSE.

 

On Thursday, the telecom operator informed the stock exchanges that it the DoT has approved its merger with Tata Teleservices (Maharashtra) Ltd, the consumer mobile operations of Tata Group.

Bharti Airtel Slips After DoT Approves Merger With Tata Teleservices
Bharti Airtel: Quotes, News
BSE 694.45BSE Quote1.95 (-0.28%)
NSE 694.50NSE Quote1.55 (-0.22%)
Tata Teleservices Maharashtra: Quotes, News
BSE 47.75BSE Quote2.5 (-5.24%)
NSE 48.05NSE Quote2.5 (-5.20%)

The statement informed that the Department of Telecommunications vide its letters dated 6 February 2020 has conveyed to the company that the schemes of arrangement with reference to demerger of consumer mobile business of Tata Teleservices (Maharashtra) Limited and Tata Teleservices Limited into Bharti Airtel Limited ('Airtel') and Bharti Hexacom Limited, has been taken on record.

The final approval comes two years after the companies had announced their merger plans.

In October 2017, the Tata group had announced its plan to sell its consumer mobile business to Bharti Airtel on a debt-free and cash-free basis.

The deal helps Airtel absorb Tata's mobile phone operations across the country in 19 circles (17 under Tata Teleservices and two under Tata Teleservices (Maharashtra) Ltd).

It is the last of the major merger & acquisition deals in the country after the entry of Reliance Jio Infocomm in 2016, that brought immense price competition in the telecom sector with its dirt-cheap prices.

 

While Telenor India and Tata Teleservices were bought by Airtel, Sistema Shyam Teleservices merged into Reliance Communications and later, along with Aircel, filed for insolvency. Vodafone India and Idea Cellular were also forced to merge.

The "cash free debt free deal" will help Airtel get an additional 178.5 MHz of spectrum in three bands that are widely used for 4G and Tata Group will get rid of its loss-making segment.

However, after the 24 October Supreme Court verdict, the Tata group owes nearly Rs 14,000 crore to the DoT in relation to pending adjusted gross revenue (AGR). Tata Teleservices reported its December quarter results this week, where it made an additional provision of Rs 2,151 crores towards AGR dues.

Read more about: bharti airtel
Story first published: Friday, February 7, 2020, 12:53 [IST]
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