Bharti Airtel is reportedly in advanced talks with the Tata Group to acquire Tata Play, India’s largest direct-to-home (DTH) service provider, which has been facing financial challenges. The acquisition aims to bolster Airtel’s presence in the digital TV segment, which is increasingly under pressure from the rise of over-the-top (OTT) streaming services.
Market Shifts Toward OTT
If the deal goes through, it would mark Tata Group’s exit from its underperforming content and entertainment operations. This would be the second major transaction between the two groups, following Bharti Airtel’s acquisition of Tata’s consumer mobility business in 2017.
Despite leading the DTH market with 20.77 million subscribers and a 32.7% market share, Tata Play has been struggling with widening losses, reporting a consolidated net loss of ₹353.8 crore in FY24. Airtel Digital TV, while also reporting losses, has shown growth with a 27.8% market share and an increase in subscribers in recent quarters.
According to reports, Tier 1 and Tier 2 users are increasingly switching to OTT services via home broadband, abandoning traditional DTH subscriptions in favor of cheaper online alternatives. Meanwhile, rural users are increasingly opting for Doordarshan’s Free Dish.
“The group had initially seen strategic value in Tata Play, but as the market dynamics shifted, the expected growth did not materialize,” said an executive familiar with the matter. “Airtel, on the other hand, sees Tata Play as a valuable addition to its consumer portfolio.”
Valuation Drop and Strategic Fit for Airtel
Tata Play’s valuation has significantly decreased, recently estimated at USD 1 billion, down from USD 3 billion pre-pandemic. Tata Sons currently owns 70% of Tata Play, having acquired Singapore’s Temasek Holdings’ stake for ₹835 crore in April. Walt Disney holds the remaining 30%, but has been looking to exit the TV distribution space.
Analysts view the acquisition as a strategic fit for Airtel, though challenges remain. Both companies face large pending license fee liabilities—Tata Play has been served demand notices for ₹3,628 crore, while Airtel has provisioned for potential liabilities of ₹5,580 crore.
Operational hurdles also exist, particularly around the differing satellite technologies used by the two companies—Airtel operates via the SES satellite, while Tata Play uses GSAT. Despite these challenges, negotiations have progressed in recent weeks, with a formal announcement expected soon. Airtel is likely to acquire Tata Play at a valuation similar to the recent Temasek deal, sources said.
