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Tata, Airtel in talks to combine DTH businesses post telecom merger, says report
MUMBAI: The direct to home (DTH) sector in India heading for a consolidation phase. After Dish TV-Videocon d2h merger, Tata Group and Bharti Enterprises are exploring merger of their DTH businesses.
The DTH merger talk comes in the wake of merger of the consumer telecom businesses of the two companies. Besides merging the two companies, Airtel is also considering merging Airtel Digital TV with Tata Sky.
According to CNBC TV18, the talks have entered due diligence stage and would take at least a couple of months before being finalised.
Tata Group runs DTH business under the Tata Sky brand with 21st Century Fox, which owns 30% stake in the company. Bharti Enterprises operates the DTH business under Airtel Digital TV brand.
If the merger talks fructify, it will create another distribution behemoth which will rival the size of Dish TV-Videocon d2h combine.
According to Telecom Regulatory Authority of India (TRAI), Tata Sky had 23% share of active pay DTH subscriber base of 65.31 million while Airtel Digital TV’s share was 21%, as on 30 June.
The Tata Sky- Airtel Digital TV combine had 44% market share which is equal to Dish TV-Videocon d2h’s share of 44% with Dish TV having 24% share and Videocon accounting for the remaining 20% share.
Tata Sky reported a net profit of Rs 80 crore and operating income of Rs 4472 crore in fiscal 2016, against Rs 267 crore and Rs 3723 crore, respectively, for fiscal 2015.
In FY17, Airtel Digital TV had reported gross revenue of Rs 3430.6 crore with an EBIT of Rs 357.7 crore compared to gross revenue of Rs 2917.8 crore and EBIT of Rs 184.3 crore in the year ago period.