Signal lost with Airtel, Tata seeks new DTH connection
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Kolkata | Mumbai: Tata Group is set to renew the hunt for new buyers for Tata Play direct-to-home (DTH) business after the abandonment of talks with Bharti Airtel to merge their DTH businesses due to sharp differences over valuation, people familiar with the matter told ET.The Tatas are looking to exit the DTH business as they find it as non-scalable and non-strategic to the group.The Tata Group was pushing for a valuation of about ₹7,000 crore for Tata Play in the proposed merger with Bharti Telemedia - an Airtel unit that owns Airtel Digital TV, the people said. However, Airtel had pegged the valuation of Tatas' DTH business significantly lower, at less than ₹5,000 crore, which was a key deal breaker, they added."The Tata Group reckoned it has a strong brand in Tata Play, which is India's largest DTH services player, and merited a higher valuation," said one of the persons cited above.Airtel is also believed to have walked away from the DTH merger deal as it has recently rolled out internet-based IPTV services-seen as an emerging opportunity for converting its 120 million-odd cable TV households, most of whom are still to subscribe to streaming services.Airtel as a 5G mobile operator is also investing heavily in 5G-based fixed wireless access (FWA) services, and in high-speed fibre broadband rollouts, which would allow it to offer live streaming services on digital platforms, the people said.Tata Sons and Bharti Airtel did not respond to queries."Differences over valuations may have been the key reason why Airtel and the Tatas scrapped plans to merge their DTH businesses," said Rohan Dhamija, head (India & Middle East) at management consulting firm Analysys Mason."But Airtel also possibly didn't see much value in merging Bharti Telemedia with Tata Play, given its focus on FWA and access to high-speed fibre broadband networks, which enables it to offer the gamut of video and live streaming services on digital platforms and reduces its dependence on linear pay TV platforms."He added that Airtel's recent launch of IPTV services across 2,000 cities would further reduce its dependence on pay TV platforms.IPTV, on Internet Protocol Television, is a method of delivering TV content over the internet-also seen as an alternative to mainline cable or satellite TV."The compulsion to exit the DTH business was more in case of the Tatas, while Airtel was merely weighing the pros and cons of merging the DTH businesses, and it ultimately didn't make the cut as DTH is not a core business for Bharti, and as a leading telco with access to a countrywide fibre broadband network and now IPTV services, it is better positioned to dominate the OTT (over the top) aggregation space via its scale and ability to bundle data with content," a second person said.A Tata-Bharti DTH deal, though, would have marked the second major deal in the DTH space in about a decade, after the Dish TV-Videocon d2h merger in 2016. It would also have coincided with Reliance Industries and Walt Disney merging Star India and Viacom18 to form JioStar, India's largest media and entertainment company.Tata Play-originally Tata Sky-began as a joint venture with Rupert Murdoch's News Corp. The Walt Disney Co. took over the stake when it acquired Murdoch's 21st Century Fox six years ago.Tata Sons, the holding company of the diversified Tata conglomerate, holds 70% in Tata Play, having reportedly acquired Singapore investment firm Temasek Holding's 10% stake in April 2024 for ₹835 crore, valuing the company at around $1 billion. Tata Play has over 23 million users.ET had reported this February that the Tata and Bharti groups were finalising a merger between their loss-making DTH businesses. The deal was expected to bolster Airtel's triple play strategy of bundling telecom, broadband and DTH services. Bharti had confirmed the talks with the Tatas but both parties mutually decided to terminate the discussions earlier this month.
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