Ending a 20-year-old saga of poor decisions and mounting losses, Tata Teleservices on Thursday said it will merge its consumer mobile businesses with Bharti Airtel in a cashless deal.
The deal consolidates Airtel’s standing as the country’s No. 1 operator in terms of revenue market share even if the Vodafone-Idea merger were to go through.
It also gives Airtel access to valuable spectrum to thwart the latest challenge in 4G services from Reliance Jio.
Under the deal, Airtel will get access to 178 MHz of additional spectrum and 40 million subscribers. Airtel is not paying anything to Tata Tele other than absorbing a substantial number of the 5,000 employees and paying part of the spectrum liability that the latter owes to the Department of Telecom.
Tata Tele will retain the entire debt on its books in addition to certain assets, including fixed line, broadband, enterprise operations and its stake in tower company Viom Networks.