Sunil Mittal-led Bharti Airtel is reportedly working on advancing its discussions to acquire Tata Play, the largest direct-to-home (DTH) service provider in India. As per the sources, this acquisition would mark a significant strategic move by Airtel to expand its presence in the digital TV sector amid slow market growth and to boost its non-mobile revenue streams through bundled services.
Tata Group's exit from the entertainment sector?
Earlier cited by The Economic Times, the potential sale of Tata Play indicates the Tata Group's gradual exit from content and entertainment ventures, following its 2017 decision to transfer its consumer mobility business to Bharti Airtel. This would be Tata Sons Chairman N Chandrasekaran’s second major divestment since assuming leadership.
Challenges in the DTH market
Currently, the DTH industry is reportedly facing challenges due to changing consumer preferences. Many Tier-I and Tier-II customers have shifted towards OTT streaming services via home broadband, while rural consumers have moved to more cost-effective options like Doordarshan’s Free Dish.
This shift has pressured traditional DTH providers to explore new growth strategies to remain competitive.
Strategic fit for Airtel’s growth plans
Tata Play, which was earlier known as Tata Sky, has struggled to maintain its market position as the industry evolves.
A source close to the deal remarked, “The group had initially seen strategic value in Tata Play, but market conditions shifted.” However, Tata Play could align well with Airtel's broader strategy to provide bundled services to consumers, making the acquisition a strategic fit.
Ownership stakes and valuation details
At present, Tata Sons holds a 70 per cent stake in Tata Play, having purchased Temasek Holdings' 10 per cent share for Rs 835 crore (USD 100 million) in April, which valued Tata Play at USD 1 billion. This valuation marks a significant decrease from its USD 3 billion pre-pandemic valuation. Meanwhile, Walt Disney, which owns the remaining 30 per cent stake, is also looking to exit the TV distribution business as part of its strategic shift after merging with 21st Century Fox in 2019.
What’s next from Airtel?
The talks between Airtel and Tata Sons have been ongoing for several weeks, with an official announcement expected soon. The acquisition, if finalized, could reshape the DTH landscape in India and help Airtel gain a stronger foothold in the digital TV market, positioning it to better compete against OTT platforms and cater to a wider range of customers.
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