MUMBAI — A major consolidation is underway in India's television distribution landscape as Tata Play and Airtel Digital TV prepare to merge through a share swap, according to a report by The Economic Times.
The deal will see Airtel holding over 50 per cent of the combined entity, effectively consolidating India's direct-to-home (DTH) sector as viewers increasingly shift towards digital streaming platforms.
Tata Play, formerly known as Tata Sky, is India's largest DTH provider and was previously a joint venture with Rupert Murdoch's News Corp, which was later acquired by Disney in 2019. Through this merger, Airtel will gain access to Tata Play's 19 million subscribers, bolstering its strategy to bundle telecom, broadband, and DTH services.
The merger follows the 2016 consolidation of Dish TV and Videocon d2h, and comes amid Reliance Industries and Disney combining Star India and Viacom18 to form JioStar, now India's largest media company with Rs 26,000 crore revenue in FY24.
First reported by The Economic Times on 8 October 2024, the agreement is expected to be formalised soon. Airtel is likely to control 52-55 per cent of the new entity, while Tata Play's shareholders, including Disney, will retain 45-48 per cent. Tata Sons is reportedly seeking two board seats, while Airtel's management is expected to lead operations.
"This will be a non-binding agreement," an executive familiar with the deal told the newspaper. "Both parties have been engaged for months and are expected to resolve outstanding issues quickly."
Both companies are valued at between Rs 6,000-7,000 crore each. Airtel Digital TV operates under Bharti Telemedia Ltd, a wholly owned subsidiary of Bharti Airtel. Tata Sons owns 70 per cent of Tata Play after acquiring Temasek Holding's 10 per cent stake in April 2024 for Rs 835 crore, valuing Tata Play at $1 billion, down from its pre-pandemic $3 billion.
Disney is expected to maintain its stake in the merged entity. As of September 2024, the two DTH providers had a combined 35 million subscribers, generating over Rs 7,000 crore in revenue in FY24. Tata Play also serves 500,000 broadband customers.
