Tata Play, Airtel Digital TV Eye Merger to Overcome DTH-Driven Challenges

Sunil Bharti Mittal-chaired Bharti Enterprises and N Chandrasekaran-led Tata Group are inching closer to seal a deal to merge their financially troubled direct-to-home (DTH) ventures, Tata Play and Airtel Digital TV. The two businesses are likely to take a share swap route to finalise the deal, according to the Economic Times. 

While Airtel will hold more than 50% stake in the joint entity, Tata Play’s shareholders like Walt Disney will own between 45% to 48% stake. 

“This will be a non-binding agreement, but with both sides engaged for months, they should move fast to close out all the outstanding issues. For Tata, this has been a drag, and like telecom, they are striking an alliance with a group they are comfortable with,” ET reported, citing sources. 

This combined entity will help Airtel gain more non-mobile revenue as the deal will offer a convergence of multiple services, including telecom, broadband and DTH services.

Tata, Airtel Eye Merger to Face OTT Heat 

The move by the two DTH majors comes at a time when Indian pay-TV industry is crumbling financially amidst increasing demand for streaming content and digital platforms. According to a report by Telecom Regulatory Authority of India (TRAI) published in September last year, the paid DTH subscriber base came down from 70 million in FY21 to 62 million in FY24. Despite the decline in subscriber base, Tata Play still remains the dominant player with the largest share at 31.99% followed by Bharti Telemedia at 29.38%, the report highlighted. 

The shift in consumer preferences towards the over-the-top (OTT) platforms mainly after the Covid-19 pandemic has also resulted in a decline in revenue for the DTH industry. 

“People now prefer to watch content wherever it is within their budget. TV ownership has increased but the number of hours spent watching traditional TV has decreased. This is putting pressure on DTH revenues and subscribers,” Manoj Dobhal told the Business Standard. Dobhal is CEO and executive director at Dish TV. 

The merger with the combined power of two dominant DTH players is likely to help them escape OTT heat.