With the big merger-in-progress between Vodafone and Idea Cellular, Bharti Airtel, a strong peer is starting its talks of acquiring Tata Teleservices. If the Vodafone and Idea merger actually gets implemented, it will outpace Airtel’s market revenue and lead to its loss of capitalisation. To mitigate this, Airtel’s chief Sunil Mittal devised a new strategy to maintain its leadership in the market.
Due to the toppled business of Tata Teleservices, rumours are abuzz that the topsy-turvy business is going to be sold to Bharti Airtel. Bharti Airtel is all likely to acquire Tata Tele for good. However, if rumours are to be believed, the Tata subsidiary may also be taken up by BSNL.
The Tata Tele has recorded a whopping revenue of around Rs 9,500 crore. However, the revenue is shrinking along with depleting subscribers for the Tata subsidiary. The company is also suffering from a high debt of Rs. 30,000 crore which is being met out by Rs. 2500 crore payout yearly.
A report released by Tony Worthington, a former Standard Chartered and ABN AMRO banker said that: “From structuring and approval perspectives, the easiest transaction would be for Tata Teleservices to be subsumed by Bharti Airtel. Our view is that the main alternative is a tie-up with BSNL, but other combinations exist, such as a complex merger with the Reliance Communications-Aircel business.”
“From structuring and approval perspectives, the easiest transaction would be for Tata Teleservices to be subsumed by Bharti Airtel. Our view is that the main alternative is a tie-up with BSNL, but other combinations exist, such as a complex merger with the Reliance Communications-Aircel business,” the report added.
As a matter of fact, the Tata group had earlier acquired Videsh Sanchar Nigam. So, technically, the Tatas have formed close alliances with the state-owned companies operating in India.
