Tata Sons Ltd will sell its consumer mobile business to Indiaa��s largest telecom operator Bharti Airtel Ltd virtually for free, as part of the group chairmana��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 Indiaa��s richest man Mukesh Ambani.
This has triggered a wave of consolidation in the industry, including a merger between the nationa��s second largest operator Vodafone India Ltd and No. 3 Idea Cellular Ltd to create a company that will be bigger than Airtel. Airtela��s acquisition of the Tata Teleservices assets will help narrow the gap between it and the Vodafone-Idea combine, once the merger is completed.