Tata Teleservices will merge its consumer mobile businesses with Bharti Airtel Ltd, the companies said in a statement. Well, this isn't surprising as we already came across reports of a merger between both these telcos back in June this year.
Bharti Airtel Chairman Sunil Bharti Mittal was quoted by IANS saying, "This is a significant development towards further consolidation in the Indian mobile industry and reinforces our commitment to lead India's digital revolution by offering world-class and affordable telecom services through a robust technology and solid spectrum portfolio".
The Bharti Board, which met on Thursday afternoon, has approved this transaction. But it also gets 40 million additional customers to the fold.
On Thursday, TTSL announced its plans to sell wireless mobile business to Bharti Airtel.
This merger, which is subject to regulatory approvals, is being done on "debt-free cash-free basis", with all past dues and liabilities to be settled by Tata.
The proposed merger will include transfer of all the customers and assets of Tata CMB to Bharti Airtel, further augmenting Bharti Airtel's overall customer base and network. Tata will also retain its stake in Viom and will take care of the liabilities associated with it.
Bharti Airtel will acquire Tata Group's loss-making mobile telephony business, nearly for free, boosting its spectrum holding and raising subscriber base while saving the Tatas from the prospect of having to shut down the struggling unit.
The transaction will create substantial long-term value for shareholders given the significant synergies, he said. " Mr. Mittal further added".
"The employees of Tata will be demerged on the lines of the two businesses ie CMB and EFL (Enterprise and Fixed Line and Broadband), and post an optimal manpower planning will be moved accordingly", it added. Finding the right home for our longstanding customers and our employees has been the priority for us. This comes after 4 months of continuous talks between the two companies and finally, N Chandrasekaran, the head at Tata Sons can look to focus on other verticals of Tata Sons as the telecom business was one of the loss-making verticals of the Tata Sons. It of course might have to fork out USA $ 1.2 billion to the government if it wants to liberalise the 1800 Mhz spectrum which its gets from TTSL but the choice of that will be with Bharti.
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