Tata comes from nowhere to top Indian subscriber adds

The Telecom Regulatory Authority of India (TRAI) has released subscriber numbers for August, and somehow Tata Teleservices topped the net add list.

It still doesn’t quite have the numbers to compete at the top of the overall rankings, but if the subscriber numbers from August are anything to go by, Airtel has bagged itself a nice acquisition. In terms of the overall performance of the notable names in the market:

  • Tata Teleservices added 4.89 million subscriptions over the month
  • Reliance Jio has almost 4.1 million net additions
  • Airtel lost 765,000
  • Vodafone was down 2.4 million
  • 6 million subscriptions vanished from Idea’s ranks
  • Reliance Communications managed to misplace 4.6 million customers

Last month, Bharti Airtel agreed to acquire the ‘struggling’ mobile business of Tata Teleservices, in what is looking like some great business now. As part of the deal, all past liabilities and dues are to be settled by Tata, while Airtel would absorb the 40 million customers of Tata. According to TRAI, this number has now swelled by 11% without Airtel having to do a thing, taking market share to 3.96%.

Unsurprisingly, Airtel still stands at the top of the market share rankings with 23.7%, while Vodafone and Idea take two and three with 17.55% and 16.11%. The combination of these two would certainly make a monster business, but dropping a combined 5 million customers is a worry. We’re not too sure how many customers were exchanged between to two, but 5 million is still a very large number. Reliance Jio’s market share now stands at 11.19%.

Elsewhere in the Indian market, American Tower has been named as the acquirer of the standalone tower businesses of Vodafone India and Idea Cellular.

The pair have separately agreed to sell their respective standalone tower businesses in India to ATC Telecom Infrastructure Private Limited for an aggregate enterprise value of $1.2 billion. The combined portfolio has approximately 20,000 towers with a combined tenancy ratio of 1.65x. As part of the agreement, the trio have agreed to treat each other as long-term preferred partners.

Bharti says we’ll have a bit of Tata

Rumours have been swirling for a few days and it would appear there is some substance; Bharti Airtel will absorb Tata Group’s struggling mobile business.

The acquisition is still subject to regulatory approval, however it would transfer all customers and assets of Tata Consumer Mobile businesses to Bharti Airtel. It wouldn’t necessarily be considered one of the major players in the Indian space, but Bharti will still bolster its ranks by an additional 40 million customers. Not a bad bit of business considering all past liabilities and dues to be settled by Tata.

“This is a significant development towards further consolidation in the Indian mobile industry and reinforces our commitment to lead India’s digital revolution by offering world-class and affordable telecom services through a robust technology and solid spectrum portfolio,” said Sunil Bharti Mittal, Chairman of Bharti Airtel.

“The acquisition of additional spectrum made an attractive business proposition. It will further strengthen our already solid portfolio and create substantial long-term value for our shareholders given the significant synergies.”

The merger would include assets in the 1800, 2100 & 850 MHz bands, as well as the right to use Tata’s existing fibre infrastructure. This is where Bharti will have to fork out a bit more cash however, as it would undertake a small portion of the unpaid spectrum liability.

It’s a rumour which has been around for a while, as Tata never really got going in the Indian mobile space. Aside from being a side-player in the prolonged battle between Jio and Bharti, it has also been battling minority shareholder NTT Docomo in a $1.2 billion dispute. This was an argument which was settled a few months back, but it would appear Tata just wants clear of the raging consumer mobile war. Might not be a bad move considering how slim the profit margins are looking.

While consolidation will certainly help Bharti fight back against Jio, you have to wonder whether the consumer is going to get the sharp end of the stick. Tata is just the latest brand to disappear, with Telenor exiting in February and Vodafone merging with Idea; you have to start wondering whether there are going to be enough providers around to offer variety in the second most populated country in the world.