Bharti Airtlel Ltd, India's largest mobile-phone operator, has agreed to acquire the consumer telecom business of the diversified Tata Group, the companies said in a joint statement. Tata's consumer mobile business operations and services will continue as normal until the completion of the transaction. It will also enable Airtel to bolster its strong spectrum foot-print with the addition of 178.5 MHz spectrum, according to a company statement.
The companies said the deal is on a no-debt, no-cash basis, implying Airtel is not taking over any of the about Rs 40,000 crore debt with Tata Teleservices and is neither paying any cash.
Its parent, salt-to-software conglomerate Tata Group, is also in the middle of a restructuring exercise to improve profitability and cut its complex structure under its new chairman N. Chandrasekaran. Finding the right home for our longstanding customers and our employees has been the priority for us. "We have evaluated multiple options and are pleased to have this agreement with Bharti", Tata Son's chairman, N Chandrasekaran said.
Tata Communications today said it will explore the possibility of acquiring the enterprise business of Tata group firm, Tata Teleservices. The venture was also incurring cash losses on a monthly basis.
Agrawal, who in July joined Tatas from Aditya Birla Group, said closing down the business would have been against the ethos of Tata Group and would have rendered employees jobless. The Indian conglomerate agreed to withdraw its objection to the enforcement of an worldwide arbitration court's $1.17 billion award to Docomo over a dispute surrounding the terms of the Japanese company's exit from the partnership.
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"Instead of closing down the consumer mobile business, which would have entailed a much higher cost and involved letting go of employees and vendors etc, we have chosen this route", Tata Group chief financial officer Saurabh Agrawal told PTI. The merger is on a debt-free cash-free basis.
In August, Tata Steel formed a joint venture with Germany's ThyssenKrupp to manage operations in Europe, after a round of sell-offs of steel plants in the United Kingdom and in continental Europe. Tata will also retain its stake in Viom and will take care of the liabilities associated with it. For them it was a choice between whether you shut it down completely or merge with a player.
Bharti Airtel has chose to acquire the wireless business of Tata Teleservices, an ET report stated.
India cellular services major Bharti Airtel Ltd Friday clarified that the. This will surely come in handy for posing formidable challenge to Mukesh ambani owned Reliance Jio.
The 19 circles coming to Bharti "represent bulk of India's population and customer base", it said. Jio has gained 12.8 crore subscribers with in a year.