Tata Play, Airtel to merge DTH operations in an all-stock deal: report

Direct-to-home digital broadcasting businesses Tata Play and Airtel Digital TV are planning to merge amidst continued loss of business to free-to-air channels like DD and the growing number of video streaming and pod casting OTT platforms.

Reports say the Tata and Bharti groups are working on an all-share merger of their loss-making DTH businesses in order to withstand challenges.

Under the proposed merger plan, Airtel will hold a majority stake of 52–55 per cent in the merged entity, while Tata Play along with Walt Disney will hold the remaining 45-48 per cent stake. 

Under the share-swap deal both the companies are valued at Rs6,000-7,000 crore each, according to reports. 

With a majority stake in the new entity, the merger will enhance Airtel's non-mobile revenues. 

Airtel Digital TV operates through Bharti Telemedia Ltd, a wholly owned subsidiary of the listed telecom entity Bharti Airtel.

The two have a combined DTH subscriber base of 35 million as of September 2024, with FY24 revenues of over 7,000 crore. 

Tata Play serves an additional 5 lakh broadband customers through its subsidiary, Tata Play Broadband.

With Tata Play’s 19 million additional DTH connections, Airtel can hope to integrate its telecom, broadband and DTH services. 

The merger move comes after a sharp fall in Tata Play’s market valuation from the pre-pandemic level of $3 billion to around $1 billion, despite the Tata Group’s Rs835-crore purchase of Temasek's 10 per cent stake in Tata Play. 

Disney, as per reports, wants to retain its stake but does not want to be part of TV distribution business in India.

The agreement, however, remains non-binding, and despite months of talks there are still some outstanding issues, which the companies hope to solve soon.