Bharti Airtel eyes Tata’s assets
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India may see a mega merger this year, if reports out of the region are correct. Tata Group has long been seeking a way to reconfigure its capital structure and relieve the pressure of its debt, and they may have found a way to do it with the help of the rival Bharti Enterprises group.
The two companies are talking about some sort of merger of Bharti Airtel with Tata Teleservices, Tata Communications, and Tata Sky. Now, this would obviously have huge repercussions in the Indian market itself, and the prospect of Tata Communications and its global network infrastructure, top 6 internet backbone, and wholesale/enterprise customer base changing hands is another matter.
Tata Communications has been a player global consolidation of telecommunications assets on both sides of the table over the years. They have been fixture in the submarine cable business ever since buying the Tyco Global Network and Teleglobe back in 2005. They also bought BitGravity to enter the CDN space back in 2011.
More recently, the company has been monetizing assets to help with that debt load. Tata sold its South African unit Neotel to Liquid Telecom after a similar deal to sell to Vodacom collapsed. And they sold a majority stake in the company’s data center business to ST Telemedia last year.
Should a deal happen and these assets land in the hands of Bharti Airtel, it might be that the winds of consolidation shift further. But in which direction is not that clear.
That being said, it’s still just talk right now and in all likelihood will never be anything else. Until it is, of course.
Questions & Answers
Q.Which specific Tata entities are reportedly involved in discussions with Bharti Airtel?
Which specific Tata entities are reportedly involved in discussions with Bharti Airtel?
The discussions involve a potential merger of Bharti Airtel with Tata Teleservices, Tata Communications, and Tata Sky. These are the specific parts of the Tata Group mentioned in the context of the potential deal.
Q.What is Tata Group's primary motivation for considering a deal with Bharti Enterprises?
What is Tata Group's primary motivation for considering a deal with Bharti Enterprises?
Tata Group is seeking a way to reconfigure its capital structure and relieve the pressure of its significant debt. The reported discussions could offer a solution to these financial challenges.
Q.Has Tata Communications recently sold any of its assets?
Has Tata Communications recently sold any of its assets?
Yes, Tata Communications recently sold its South African unit Neotel to Liquid Telecom. They also sold a majority stake in the company's data center business to ST Telemedia last year.
Q.What are some key assets of Tata Communications that make it a significant player?
What are some key assets of Tata Communications that make it a significant player?
Tata Communications possesses global network infrastructure and is a top 6 internet backbone. It also has a substantial wholesale and enterprise customer base, and a long history in the submarine cable business.