Bharti Airtel in final stages of Tata Play acquisition: Reports

Bharti Airtel, led by Sunil Mittal, is in advanced talks to acquire Tata Play, the direct-to-home (DTH) service provider in India, which is currently facing losses, according to a report by The Economic Times citing insider sources. This potential acquisition is seen as a strategic move for Airtel to strengthen its foothold in the digital TV sector, which is experiencing slow growth, while also enhancing its bundled services to boost non-mobile revenues.

Tata's exit

Should the deal proceed, it would mark Tata Group’s exit from the content and entertainment sector, following its previous divestiture of the consumer mobility business to Bharti Airtel in 2017. This was the first major divestment by Tata Sons Chairman N. Chandrasekaran after he assumed leadership of the group.

The DTH market is under pressure as consumer preferences shift, with more Tier-I and Tier-II customers opting for over-the-top (OTT) streaming services through home broadband, while rural users are turning to more affordable options like Doordarshan’s Free Dish. This shift has compelled traditional DTH operators to explore new growth strategies.

Negotiations between Airtel and Tata have been underway for several weeks, with an official announcement anticipated soon, although Tata Sons has not yet made a formal comment. Tata Play, formerly Tata Sky, has faced challenges in maintaining its market position due to changing industry conditions. A source close to the discussions noted that while the Tata Group initially saw strategic value in Tata Play, market dynamics have shifted, making it a better fit for Airtel’s strategy of bundled consumer offerings.

Tata Sons owns a 70% stake in Tata Play, having acquired a 10% share from Singapore’s Temasek Holdings in April for Rs 835 crore ($100 million), which valued the company at $1 billion—a drop from its $3 billion valuation before the pandemic. Walt Disney, which holds the remaining 30%, is also seeking to exit the TV distribution business as part of a broader strategic shift following its 2019 merger with 21st Century Fox.

Airtel is expected to acquire Tata Play at a valuation similar to the recent Temasek deal. Tata Play had initially planned to go public with an IPO in 2022, but those plans were shelved in August.

Digits play the role

Since its launch in 2006, Tata Play has amassed 20.77 million subscribers, accounting for a 32.7% market share, according to March data from the Telecom Regulatory Authority of India (Trai). Bharti Telemedia, which operates Airtel Digital TV, holds a 27.8% share, making it the second-largest player in the DTH sector. Airtel Digital TV has been steadily increasing its subscriber base, reporting 190,000 net additions in the June quarter, achieving three consecutive quarters of growth. This stands in contrast to other players in the DTH industry, such as Dish TV (20.8% market share) and Sun TV Direct (18.7% market share), which are struggling to expand.