Tata Play and Airtel Digital TV, Bharti Airtel’s DTH business, are reportedly in the final stages of negotiating a merger.
Per Economic Times, the deal, structured as a share swap, is nearing completion, with Bharti Airtel poised to take a majority stake of 52-55% in the combined entity, while Tata Play’s shareholders, including Tata Sons and Walt Disney, will retain 45-48%.
FY24 revenues for the combined entity exceed Rs 7,000 crore ($807 million at current exchange rates). The deal values both operations at Rs 6,000-7,000 crore each.
The merger is expected to help Airtel grow its broadband and entertainment business by bundling telecom, broadband, and DTH services.
If the merger goes through, it will also be the biggest in India’s DTH sector since Zee Group-owned Dish TV’s merger with Videocon d2h in 2016.
The merger talks come as the DTH sector grapples with mounting challenges, including a sharp decline in subscribers due to the rise of over-the-top (OTT) streaming platforms and competition from free services like DD Free Dish.
Tata Sons, the parent company of the conglomerate, holds a 70% stake in Tata Play after purchasing Singapore-based Temasek Holding Pte’s 10% stake for Rs 835 crore ($100 million) in April 2024.
The Walt Disney Company holds a 30% stake in Tata Play but has been looking to exit the TV distribution business after the formation of JioStar.
Industry analysts estimate that the combined entity will serve approximately 35 million paid subscribers — drawn from Tata Play’s 19 million and Airtel Digital TV’s roughly 16 million — as of September 2024.
News reports stated that operational hurdles remain, notably the differing satellite infrastructures — Tata Play uses GSAT, while Airtel relies on SES — which could complicate integration and cost synergies. Past mergers, like Dish TV’s with Videocon d2h, have faced similar challenges, leading to customer churn.
The pay-TV market has been facing a steady decline, with the subscriber base falling from 120 million to 84 million homes in recent years. According to the Telecom Regulatory Authority of India (TRAI), the number of DTH users has dropped to 60 million in financial year 2023-24 (FY24) from 70 million in FY21, signalling a clear shift in consumer preferences and a shrinking market for traditional pay-TV services.
Per Business Standard, both Bharti Telemedia and Tata Play are also dealing with significant regulatory hurdles. The two companies face pending license fee disputes with the government, with Bharti Telemedia’s dues amounting to Rs 5,580 crore and Tata Play’s amounting to Rs 3,628 crore. These ongoing disputes add an element of uncertainty to the merger and the overall financial outlook for the companies involved.
