/vnd/media/agency_attachments/bGjnvN2ncYDdhj74yP9p.png)
/vnd/media/post_banners/wp-content/uploads/2021/02/Untitled-1.jpg)
According to media reports, Bharti Airtel is in talks with Dish TV to acquire a majority stake in the DTH provider.
Bharti Airtel Looking to Diversify
Mint reported that Bharti Airtel will look to acquire a 5.93% stake from the promoter group of Dish TV. Along with that, the telco will buy a 25.63% stake that Yes Bank holds. For the time being, Airtel has offered Rs. 20/share, a 14% premium on the current share price.
If the move goes through, Airtel's market share will jump to 49.63%, making it the largest DTH player in the country. For now, the telco has had a due diligence report by EY, and Airtel executives have already met with Essel Group's founder, Subhash Chandra, to discuss terms.
For now, the telco will buy the stake, which will take it to over 30%. After that, the telco will keep on buying stakes from other stakeholders, until it gets to 51%. Interestingly, in India's DTH market, Airtel has the second-largest market share, with 25.54%. Tata Sky has the largest market share, with 33.3%, and Dish TV holds the third-largest market share, with 24.09%.
Why Airtel Needs to Diversify
Bharti Airtel has been around since 1995, and since then, the world has changed. Jio's advent and subsequent rise have threatened both Airtel and in a more profound sense, Vodafone Idea. As such, the telcos have had to look at ways to diversify cash flows, away from telecom.
Bharti has been looking to rejig the finances in order to reduce the burden on its telecom business. Therefore, the company has been working in order to separate the telco entirely from the rest of the Bharti umbrella and bring its digital assets under a different entity called Bharti Global. None of this has been set in stone yet.
The fact is that Bharti Enterprises draws most of its income from its telecom business. Therefore, it doesn’t have the kind of equity that RIL had to just infuse in the telecom business via a WOS. However, creating a different entity for its digital assets can be a possible play for Airtel here; its digital assets include Wynk Music, Airtel XStream, Airtel Thanks, Airtel Payments Bank, Airtel Ads, Airtel IQ, Airtel Secure, Airtel Cloud, and Nxtra.
This move will allow Airtel to consolidate its position in a market with almost double the ARPU than its telecom business, which will allow it to better its cash flows.