In yet another consolidation in the Indian industry, two major direct to home (DTH) television service operators, Airtel Digital TV and Dish TV have reportedly agreed to merge with each other. According to an Economic Times report, the combined entity could be holding a subscriber network of 40 million plus, one of the largest TV distribution companies in the world. They would then hold 62% of the market, leaving 25% with Tata Sky and the remaining with the regional player Sun Direct.
Bharti Telemedia is the company that owns and operates Airtel Digital TV service in which Warburg Pincus has a 20% stake. It is reported that Warburg has also given its nod to the merger proposal. Post the merger too, Warburg will stay invested in the combined entity, as per this report.
The details still to emerge are with regard to the financials and the share of the equity holding after the entities are merged. Dish TV India is a listed company and is part of the Zee Entertainment group. The Zee group has its own debt issues and this transaction may ease the debt situation a little, according to observers who are in the know. The consolidation will definitely improve the financial health of the company.
The thought of consolidating their operations follows the entry of Reliance Jio with its Jio Fiber broadband service where it plans to integrate a television service as well, issuing set top boxes. Though the set top boxes are yet to be distributed to the customers, the threat was always there.
On the multisystem operators space too, Jio had taken over DEN Networks and Hathway Cables, thereby establishing a solid presence across the country.
In terms of the numbers, Dish TV has a subscriber count of 23.94 million whereas Airtel Digital has 16.21 million. The operating revenue posted were Rs 893.20 crore and Rs 789.30 crore respectively. The operating profit posted by Dish TV was Rs 520.50 crore whereas Airtel Digital TV posted an Ebitda of Rs 560.70 crore. These figures were for the quarter ended September 2019.
A mini consolidation of sorts had already happened in the DTH business in India with Videcom d2h being taken over by Dish TV and Reliance Digital TV turning free-to-air.
The companies are yet to officially confirm this merger development.