The Department of Telecommunications (DoT) has approved the merger of Tata Teleservices’ consumer mobility business with Bharti Airtel Limited after nearly two years. The merger happened towards the end of 2018 and early 2019. The DoT was not willing to give its approval to the merger till its claim of submission of bank guarantees worth Rs 8,000 crore towards one-time spectrum charges.
The issue went to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), which ruled in favour of the two operators and against the DoT. Not satisfied with this order, the DoT approached the Supreme Court of India. The Supreme Court too has now refused to stay the order of TDSAT and following its defeat in the apex court, the DoT has reluctantly issued the order of approval to the merger. However, there is a caveat to its order: “the DoT approval is without prejudice to the rights and contentions of the DoT till the Telecom Petition No. 22 of 2019 filed by BAL which is pending before Hon'ble TDSAT (and appeal, if any, against the Judgement(s) of the Hon'ble TDSAT) is disposed of”. BAL stands for Bharti Airtel Limited.
The two companies in question had already followed the rest of the formalities like passing resolutions through their respective boards and finally submitted the details to the Registrar of Companies to take it on record.
The advantage for Bharti Airtel out of this deal is it gains an additional spectrum of 178.5MHz. For the Tata Group, it would mean a big relief from the unnecessary drain of its resources through unviable businesses.
This merger case brings to the fore the churning in the telecom sector since the third quarter of the year 2018 when Reliance Jio entered the scene offering free voice calling and data at throwaway prices. Several players fell by the wayside, including Reliance Communications, Tata Teleservices, Aircel and Telenor India. The final result is there are only two players left standing apart from Jio, Bharti Airtel and Vodafone Idea, after the two players decided to merge to survive.
These companies are also facing a severe crisis presently following the AGR dues order by the apex court.