Telecom sector may witness Airtel acquiring Tata Teleservices


29 Jun 2017

Indian telecom sector will become a four-operator market, says survey

The Telecom sector is currently going through a big reshuffle. Reliance Jio has majorly disrupted the already financially ailing sector.

Operators are now offering freebies and undergoing consolidation to hold their ground.

Recently, London-based global analyst company CCS Insight has come up with a detailed report that delves into what may happen in near future within the sector.

Here's all about it.


Airtel will not lose its position

Airtel will not lose its position

The report says it's most likely that Sunil Mittal-led Bharti Airtel will acquire Tata Teleservices.

Echoing the speculation that Airtel has kick-started an acquisition spree, keeping the merger-in-progress of Vodafone and Idea Cellular in mind.

Vodafone-Idea Cellular would knock Airtel from its leading position. In order to prevent that from happening, Airtel may end up buying Tata Teleservices, the business side of it notwithstanding.

Tata Teleservices

Why is Tata Teleservices a bad buy?

Although Tata Teleservices is raking revenues of Rs. 9,500 crore, it also spends Rs. 2,500 crore annually for debt servicing. It has total outstanding borrowings of around Rs. 30,000 crore and is losing customers rapidly.

In CCS survey, 50% said Tata Teleservices will be acquired by Airtel, 22% stood for the possibility of BSNL tie-up and 32% said it'd be some other network operator.

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A four-operator market will have positive impact

A four-operator market will have positive impact

The report, titled India: Halcyon Days Ahead in a Four-Operator Market, is a survey conducted with 57 telecom M&A influencers.

A staggering 68% of its expert respondents believe that eventually, Indian telecom sector will consolidate to a four-operator market.

According to the respondents, this market consolidation will have a positive outcome. Network operators, consumers, and manufacturers of infrastructure and handsets will gain from it.


Brothers to rivals, rivals to partners

The survey also says that Ambani brothers may bury the hatchet and merge their firms together in future.

Anil Ambani's RCom and Aircel are already going through a merger. This newly merged entity fused with his brother Mukesh Ambani's Jio will be unstoppable.

This is, however, based on the assumption that personal rivalry wouldn't get in the way of doing good business.

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