Airtel in Final Talks to Buy Tata Play, Aims to Dominate Digital TV as OTT Rivals Rise

Bharti Airtel, led by Sunil Mittal, is in advanced discussions with the Tata Group to buy Tata Play, India’s largest direct-to-home (DTH) company. Tata Play has been struggling with losses, and Airtel aims to boost its presence in the digital TV market through this acquisition. The move would also help Airtel improve its non-mobile revenue by offering bundled services to its customers.

Tata Group’s Exit from Content Business

If the deal goes through, Tata Group will exit its content and entertainment business. This would be the second major deal between Bharti Airtel and the Tata Group after Airtel acquired Tata’s loss-making consumer mobility business in 2017.

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As customers increasingly switch to over-the-top (OTT) services and cheaper online alternatives, the DTH market faces growth challenges. However, rural areas continue to use Doordarshan’s Free Dish, further impacting the market for paid DTH services.

Negotiations Expected to Conclude Soon

Negotiations between Airtel and Tata Group have been going on for weeks, and a formal announcement is expected soon. Tata Group, which currently owns 70% of Tata Play, had previously planned to list the company through an IPO. However, those plans were put on hold in August.

Tata Play started operations in 2006 and has 20.77 million subscribers, making up 32.7% of the DTH market, according to data from March 2024. Bharti Telemedia, Airtel’s DTH arm, comes second with a market share of 27.8%. Other key players include Dish TV and Sun TV Direct.

Strategic Move for Airtel

For Airtel, acquiring Tata Play would help the company compete with Reliance Jio, which has been expanding aggressively in the digital space. Analysts believe this deal could give Airtel access to a large subscriber base and strengthen its overall market position.

Despite its leadership in the DTH market, Tata Play has been struggling financially. In FY24, the company reported a consolidated net loss of ₹353.8 crore, a significant increase from the ₹105.25 crore loss in the previous year. Revenue from its DTH business also dropped by 6.1% to ₹3,982.57 crore in FY24. Meanwhile, Airtel Digital TV saw its net loss shrink to ₹76 crore in FY24, while its revenue grew slightly to ₹3,045 crore.