Tata Play, Airtel Digital TV merger in the works: Report
What's the story
Tata Play and Airtel Digital TV are said to be inching closer to a merger, The Economic Times reported.
The move comes as a strategy to counter the rising popularity of live streaming services and a shrinking customer base in the DTH sector.
The merger, if it goes through, will be executed via a share swap, with Airtel likely to hold over half of the merged entity.
Ownership
Airtel to dominate merged entity
The merger will strengthen Airtel's foothold in the non-mobile space by boosting its revenue. After the merger, Airtel will reportedly own over 50% of the new entity. Tata Play, previously Tata Sky and India's largest DTH provider, began as a joint venture with News Corp.
Strategic benefits
Merger to expand Airtel's reach, streamline services
The merger is expected to expand Airtel's footprint to nearly 20 million homes currently serviced by Tata Play.
It will also allow the integration of broadband, telecom, and DTH services into a single subscription.
Notably, this is the second big deal in the sector after the 2016 merger of Videocon d2h and Dish TV.
Leadership structure
Airtel's senior management to lead, Tata getting board seats
The merged company will likely be headed by Airtel's senior management, while Tata is expected to get two board seats under a non-binding agreement.
The operations are being valued at about ₹7,000 crore.
Even after the merger, Disney will retain its shareholding in the new DTH entity in the country.