Tata Sons Ltd will sell its consumer mobile business to India’s largest telecom operator Bharti Airtel Ltd virtually for free, as part of the group chairman’s strategy to exit businesses which have been a prolonged drag and have little visibility of future profits.
Airtel is acquiring the assets on a debt-free, cash-free basis, except for it assuming a fraction of the unpaid spectrum fees that the Tata group owes to the department of telecommunications (DoT), the companies said in a joint statement on Thursday.
The telecom industry, particularly smaller operators such as Tata Teleservices Ltd, has been hobbled by a crippling price war after the entry of Reliance Jio Infocomm Ltd, backed by India’s richest man Mukesh Ambani.
This has triggered a wave of consolidation in the industry, including a merger between the nation’s second largest operator Vodafone India Ltd and No. 3 Idea Cellular Ltd to create a company that will be bigger than Airtel. Airtel’s acquisition of the Tata Teleservices assets will help narrow the gap between it and the Vodafone-Idea combine, once the merger is completed.