At a time when the company is looking to pare its debt, telecom and media conglomerate Bharti Airtel has received foreign direct investment approval from the government for sale of 20 per cent stake in its DTH arm to private equity firm Warburg Pincus for around $350 million, two people in know of the matter said. An Airtel spokesperson did not comment at the time of publishing. The transaction will see Bharti Airtel sell 15 per cent stake in Bharti Telemedia, while the rest 5 per cent will come from another Bharti entity.
Bharti Telemedia, the arm in which Bharti Airtel will sell the stake, is the third-largest DTH company in the country with slightly over 20 per cent market share and follows TataSky and Dish TV India. Other operators in the sector are Videocon d2h, Sun Direct TV and Reliance Big TV. Bharti Airtel is expected to use the proceeds from the sale to pare its debt, which was over $15 billion as of June 30. The company’s digital TV services had around 14.64 million subscribers as of June 30, 10 per cent higher than the year ago period. Warburg Pincus’ investment comes at a time when the DTH market is awaiting the launch of television services from Bharti’s key competitor in the telecom space – Reliance Jio.
Over the last few years, the DTH market, which has been recently impacted by over-the-top content services such as Hotstar, Amazon Prime Video and Netflix, has seen M&A activity in other companies too. In 2016, Dish TV announced the merger of its business with Videocon d2h to form combined entity called Dish TV Videocon Ltd.