Bharti Airtel May Acquire Tata Play to Consolidate Presence in Digital TV Segment

Sunil Mittal-owned Bharti Airtel is likely to acquire India’s largest direct-to-home business, Tata Play (formerly known as Tata Sky). The telecom giant has reached advanced negotiations with the Tata Group. If the deal is sealed, it will strengthen Airtel’s position in the digital TV segment and will increase competition in the broadband sectors. 

“Bharti Airtel is in advanced negotiations with the Tata Play, India’s largest direct-to-home (DTH) business and the aim is to consolidate its presence in the digital TV segment that’s facing growth challenges while improving Airtel’s bundled offerings to boost its non-mobile revenue through convergence,” the Economics Times reported, citing sources. 

Additionally, Tata Play fits well in the strategic plans of Airtel and its portfolio of offerings to consumers, said the source. 

The move by Tata Group to offload Tata Play from its basket of businesses is mainly due to continuous losses incurred. According to the company’s statement, the losses widened from Rs 105.25 crore in FY23 to Rs 353.8 crore in FY24. Moreover, revenue also declined from Rs 4,240.04 crore in FY23 to Rs 3,982.57 crore in FY24. 

Presently, the direct-to-home service provider is not a publicly listed company. Although it has received the nod from the Securities and Exchange Board of India (Sebi) to raise funds through an initial public offering (IPO), the ministry of information and broadcasting (I&B) halted the process. Following the ministry’s move, the company released a statement. 

“In the aforesaid letter, the MIB had mentioned certain observations which states that the existing share structure of the company is apparently in violation of the DTH guidelines,” said Tata Play in the statement. 

Tata’s Move to Narrow Down Losses 

As the over-the-top (OTT) platforms have started gaining momentum in India, the demand for DTH services have witnessed sharp decline. Tata Play, the DTH service provider have also felt the heat as despite being the market leader, its profits have come down persistently. 

Meanwhile, the increase in popularity of over-the-top (OTT) platforms has resulted in a decline in consumption of DTH services. Consequently, Tata Play, despite being the market leader, has found itself on shaky ground when it comes to profitability. 

According to a report by Media consulting firm Ormax Media, 13.8 per cent growth in the OTT has been recorded in comparison to 2023. 

To narrow the losses, Tata Play removed some of the Sony Channels from its consumer packs. The company cited declining popularity and cost savings for consumers as reasons for the removal. This move led to a clash between Tata Play and Sony. 

If the deal works out well between the two companies, it will be the second such acquisition by Bharti Airtel. Earlier, in 2017, the Tata Group divested their consumer mobility business (CMB) to Bharti Airtel on a ‘debt-free, cash-free' basis.