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Introduction:
The merger talks between two of
the Original
Bharti Airtel and Tata Group have mutually decided to end the talks about combining their DTH businesses, Airtel Digital TV and Tata Play, after failing to reach an agreement. This decision was communicated in a filing made by Airtel on Saturday. The merger talks, which were first confirmed by Airtel in February, sought to combine Tata Play, Indiaâs largest DTH provider, with Bharti Telemedia, the DTH division of Sunil Mittalâs telecom giant. The merger would have brought together two struggling DTH players in the face of a rapidly growing digital streaming market.
Sources revealed that the deal discussions involved a share swap, where Airtel could have held 52-55% of the combined company, and Tata Playâs stakeholdersâincluding The Walt Disney Coâwould have retained 45-48%. Both companies were valued at âš6,000-7,000 crore each.
Tata Play, formerly known as Tata Sky, is mainly owned by Tata Sons, with a 10% stake recently acquired from Temasek Holdings in April 2024. The company has been valued at around \$1 billion. Disney holds a minority stake in Tata Play, a result of its acquisition of 21st Century Fox in 2019.
The failed merger would have represented the second major consolidation in Indiaâs DTH industry, following the 2016 Dish TV-Videocon d2h merger. It also comes at a time when Indiaâs largest media conglomerate, JioStar, was formed through the merger of Reliance Industries, Disney, and Star India.
Now, with the merger off the table, both Airtel and Tata Play will continue navigating the competitive DTH market on their own, as digital streaming platforms continue to reshape consumer viewing preferences.
What Undercode Says:
The decision by Bharti Airtel and Tata Group to call off the merger of their DTH businesses marks a key turning point in the Indian pay-TV industry. While the original merger idea aimed to consolidate two major players in a saturated market, it is clear that both companies are facing the same challenge: competition from rapidly growing digital streaming platforms.
The Indian DTH sector has been struggling for years, primarily due to the shift in consumer behavior. Audiences are increasingly moving away from traditional satellite TV and opting for OTT (over-the-top) services like Netflix, Amazon Prime Video, and Disney+. These platforms offer greater flexibility, a broader range of content, and often at more affordable price points compared to traditional DTH services.
Another major factor in the collapse of the merger discussions seems to be the unresolved issue of valuation. Both Airtel and Tata Play have been valued at âš6,000-7,000 crore, but with losses on both sides, finding a fair balance for a share swap likely became a point of contention. In fact, this isn’t the first time a merger has faltered in Indiaâs DTH sector. The Dish TV-Videocon d2h merger was the last notable consolidation, and now it appears that further consolidation could face similar challenges due to the industry’s fundamental weaknesses.
The failure of this merger is also notable in light of the formation of JioStar, a new media giant formed from the merger of Reliance Industriesâ Jio and Disney’s Star India and Viacom18. JioStar is already poised to dominate the media landscape in India, putting even more pressure on traditional DTH players like Airtel and Tata Play. The fact that these companies couldnât come to an agreement could signal an even more challenging future for them.
With rising competition from JioStar and digital streaming services, both Airtel and Tata Play are likely to continue facing difficult times unless they innovate and adapt to consumer preferences. The shift to OTT platforms is undeniable, and itâs unclear if DTH companies can turn the tide.
Fact Checker Results:
The decision to terminate merger talks was mutual, as both parties couldnât reach a satisfactory agreement. â
The original talks centered around a share swap, with Airtel potentially controlling 52-55% of the combined entity. â
Both Tata Play and Airtel Digital TV are losing market share to digital streaming services. â
Prediction:
Given the increasing dominance of digital platforms and the rise of JioStar as a media powerhouse, Airtel and Tata Play may face an uphill battle in the coming years. Itâs likely that more DTH companies will follow suit by exploring collaborations or diversifying into streaming services themselves, in order to survive the digital transformation of Indiaâs entertainment industry. If they donât, we might witness further consolidations or even a significant decline in the DTH market.
References:
Reported By: timesofindia.indiatimes.com
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