New Delhi: Global private equity firm Warburg Pincus is planning to acquire 20% equity stake in Bharti Telemedia, the direct-to-home arm of telecom major Bharti Airtel Limited for $350 million, the latter said in a statement.
Bharti Telemedia offers services under the Airtel TV brand and currently has 14 million subscribers in the country.
In a statement, Airtel said that an affiliate of Warburg Pincus will acquire 20% stake in Bharti Telemedia, 15% of which will be sold by Bharti Airtel and the balance by another Bharti entity which holds 5% stake.
“Airtel TV is very well positioned in the DTH space, and we are committed to grow our share of the market through a combination of innovation, value engineering, customer service and distribution initiatives. We look forward to working with Warburg Pincus towards achieving our vision of making Airtel TV India’s leading DTH platform,” said Gopal Vittal, managing director and chief executive officer (India & South Asia) at Bharti Airtel, in a statement.
The company added that Airtel board of directors has approved the transaction on Tuesday, while the transaction is subject to regulatory approvals. As part of the transaction, Viraj Sawhney, managing director at Warburg Pincus India will join the board of Bharti Telemedia Limited.
“The Indian digital TV market is expanding rapidly and we believe that Airtel DTH is well positioned to capitalize on the incremental growth in digitization and new TV penetration in tier 3 and 4 towns and rural areas…. we look forward to supporting the management team during the next phase of the company’s growth,” said Vishal Mahadevia, managing director and co-head, Warburg Pincus India.
For the 12-month period that ended 30 September, 2017, Bharti Telemedia had earned $550 million in revenue. Bharti Telemedia is the third-largest DTH player with 21% market share in the 65.31 million DTH subscriber market (as of June 2017), according to a report released by the Telecom Regulatory Authority of India (Trai).
Apart from Bharti Telemedia, there are five other private DTH companies —Zee group-owned Dish TV India Ltd, Tata Sky Ltd, Videocon d2h Ltd, Sun Direct TV Pvt. Ltd and Reliance Big TV. In addition, state broadcaster Doordarshan also runs a DTH platform for free-to-air channels called DD Free Dish.
Bharti Telemedia’s move comes at a time when the DTH industry is going through consolidation. Earlier in November, Anil Ambani-led Reliance Communications (RCom) had said that it is selling its DTH subsidiary Reliance BIG TV Ltd to Pantel Technologies Pvt. Ltd and Veecon Media and Television Ltd.
In 2016, Dish TV had also announced the merger of its business with Videocon d2h to form a combined entity called Dish TV Videocon Ltd. The merger is pending approval before the information and broadcasting ministry.