Tata Play, Airtel Digital TV move closer to merger to strengthen DTH business
Airtel will likely hold around 52% to 55% of the combined entity, while Tata Play will own the remaining.
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As digital platforms gain momentum on the cost of traditional satellite TV, Tata Play and Airtel Digital TV are nearing to finalise a merger- which might strengthen their struggling direct-to-home (DTH) businesses.
The said merger follows the Dish TV-Videocon D2H merger in 2016. As of September 2024, the active subscriber base for pay DTH in India stands at around 59.91 million; where Tata Play own 31.99% of the market share, Bharti Telemedia 29.38%, Dish TV 19.53%, and Sun Direct TV 19.10%. The revenue of the four major DTH operators fell from Rs 12,284 crore in FY22 to Rs 11,072 crore in FY23.
The merger between Airtel and Tata Play is reportedly said to be done through a share swap, which will allow Airtel to increase its non-mobile revenue by offering a combination of telecom, broadband, and DTH services. Additionally, Airtel will get access to Tata Play’s 19 million homes.
The merger talks were first reported in October last year. Both operations, at present, are valued at around Rs 6,000-7,000 crore.
Tata Sons, the holding company of the diversified conglomerate, currently owns 70% of the company, after buying out Singapore investment firm Temasek Holding Pte’s 10% stake in April for ₹835 crore ($100 million), valuing the company at $1 billion, down a third from its $3 billion pre-pandemic valuation.
The Walt Disney Company owns 30% of Tata Play but has been looking to exit the TV distribution business after trimming its portfolio and merging its media operations with Reliance Jio in India. Disney inherited Sky’s legacy stake in Tata Play after its 2019 mega-merger with Rupert Murdoch’s 21st Century Fox. Prior to buying out Temasek, Tata also acquired Tata Opportunities Fund’s minority stake in the venture.
Airtel is expected to acquire Tata Play at a valuation similar to that of the Temasek deal. The plan was to consolidate the Tata stakes and list the company, with IPO documents being filed in 2022. However, Tata paused the listing plan in August.
