Airtel and Tata Discuss Merger of Struggling DTH Units as India’s TV Market Evolves
The potential deal, announced Wednesday, would combine Airtel’s Bharti Telemedia with Tata Play, a once-dominant player in India’s satellite TV market, as both companies seek to navigate a shrinking industry.
Bharti Airtel, one of India’s leading telecommunications giants, is in talks with the Tata Group to merge their loss-making Direct-to-Home (DTH) television businesses, a move that underscores the mounting pressures on traditional pay-TV providers in an era dominated by streaming services and free alternatives. The proposed deal, announced Wednesday, would combine Airtel’s Bharti Telemedia with Tata Play, a once-dominant player in India’s satellite TV market, as both companies seek to navigate a shrinking industry.
The discussions, detailed in a regulatory filing by Airtel, aim to create a merged entity through a share-swap arrangement, though specifics remain sparse. If successful, this would mark the second major consolidation in India’s DTH sector since the 2016 merger of Dish TV and Videocon d2h. For Airtel, led by billionaire Sunil Bharti Mittal, the move aligns with a broader strategy to bundle telecom, broadband, and entertainment services. For Tata, it offers a chance to offload a beleaguered asset amid financial strain and regulatory hurdles.
A Market in Decline
India’s DTH industry, once a cornerstone of home entertainment, has been steadily losing ground. Data from the Telecom Regulatory Authority of India (TRAI) shows the paid DTH subscriber base peaking at 70.99 million in December 2020 before sliding to 65.50 million by June 2023 and further to 60 million by September 2024—a stark drop from the 120 million pay-TV homes a decade ago. The culprits are familiar: the rise of streaming platforms like Netflix and JioCinema, which appeal to urban viewers, and the growth of Doordarshan’s Free Dish, a free-to-air service that has siphoned off rural audiences with no subscription fees.
Tata Play, formerly known as Tata Sky, has felt this shift acutely. In the financial year ending March 31, 2024, its consolidated loss widened to 353.9 crore rupees ($42 million), up from 105.25 crore rupees the previous year, as revenue fell 4.32 percent to 4,304.62 crore rupees. Bharti Telemedia, while more stable, posted a loss of 75.9 crore rupees on a turnover of 3,044.7 crore rupees in the same period. Together, the two control roughly 35 million subscribers and generated over 7,000 crore rupees in revenue last year, yet profitability remains elusive.
Why Merge Now?
For Airtel, the merger is a calculated step to bolster its “triple play” model—combining mobile, broadband, and DTH services into a single offering. With Tata Play’s 19 million subscribers, Airtel could deepen its reach, particularly among premium customers it hopes to convert to broadband users, who generate higher revenue per household. Analysts estimate that Airtel might target 5 million of Tata Play’s top-tier subscribers for this transition, leveraging Tata Play Broadband’s existing base of 500,000 customers.
Tata, meanwhile, appears eager to retreat from a business that has lost its luster. Once valued at $3 billion, Tata Play’s worth has slumped to $1 billion after Tata Sons bought out Temasek’s 10 percent stake for 835 crore rupees in 2024. Plans for an initial public offering, approved by India’s securities regulator, were derailed by demands from the Ministry of Information and Broadcasting to rejigger its equity structure, where Walt Disney holds 30 percent and other investors like Baytree Investments own significant shares. A merger with Airtel, which could see Tata retaining a 45 to 48 percent stake, offers a cleaner exit while preserving some influence.
A Shifting Entertainment Landscape
The broader context is a tectonic shift in how Indians consume television. TRAI data shows Tata Play leading with a 32.53 percent market share as of March 2023, followed by Airtel Digital TV at 28.45 percent, Dish TV at 20.46 percent, and Sun Direct at 18.57 percent. Yet the industry’s total subscriber pool has contracted as broadcasters increasingly offer popular channels on Free Dish, undercutting pay-TV’s value proposition. At the same time, telecom giants like Airtel and Reliance Jio are racing to integrate high-speed internet and curated streaming content, leaving standalone DTH players struggling to adapt.
Airtel’s play here echoes its 2017 deal with Tata, when it absorbed Tata’s mobile business to strengthen its telecom dominance. Now, it aims to replicate that success in entertainment, potentially commanding a majority 52 to 55 percent stake in the merged DTH entity. But challenges loom: both companies face hefty license fee disputes—5,580 crore rupees for Bharti Telemedia and 3,628 crore rupees for Tata Play—that could complicate the deal’s financials.
Looking Ahead
As due diligence begins, the Airtel-Tata merger could reshape India’s television and broadband markets, offering a lifeline to an industry battered by digital disruption. For consumers, it might mean more bundled services and competitive pricing, though the days of DTH as a standalone powerhouse seem numbered. In a country where entertainment options are multiplying, this deal reflects a stark reality: adapt or fade away.
The figures cited are based on the latest TRAI reports and company filings as of February 26, 2025, with trends drawn from industry analysis.
