Airtel sells 20% in DTH arm to Warburg for Rs 2,300 crore

NEW DELHI: Bharti Airtel will sell a 20 per cent stake in its DTH business to an affiliate of private equity player

Warburg Pincus

for Rs 2,300 crore, the deal coming at a time when there is increasing competition in the sector from new entrants such as Reliance Jio and independent streaming companies like

Netflix

, Hotstar and Amazon Prime.

Bharti Airtel will sell a 15 per cent stake in Bharti Telemedia and another Bharti entity will offload 5 per cent , the company said on Tuesday.

Bharti Telemedia is currently estimated to be the thirdlargest DTH pay platform with around 14 million subscribers. The market is led by

Tata Sky

that has around 17 million users, and Dish TV is the second-largest player with around 15.9 million subscribers.

The DTH market is faced with fresh challenges from new technologies such as fibre-to-home of Jio and is in the midst of a consolidation at present. Dish TV is in the process of merging the DTH business of Videocon into itself to create the country’s largest DTH player with 28 million users.

The entry of

Warburg

Pincus, which at one point held a stake in Airtel’s telecom business, may give more muscle to latter’s DTH business, which had revenues of $550 million (about Rs 3,500 crore as per Tuesday’s exchange rate) in the year ended September 2017.

Airtel will own 80 per cent stake in Bharti Telemedia after closure of the deal. “Airtel enjoyed a very successful partnership with Warburg Pincus in the past and we are excited to partner with them once again in an attractive and fast-growing space,” Bharti Airtel MD & CEO (India &

South Asia

) Gopal Vittal said.

Bharti Telemedia claims to have a strong distribution infrastructure, with over 1,500 partners and over 1,58,000 recharge outlets in approximately 630 districts of the country.

“The Indian Digital TV market is expanding rapidly and we believe that Airtel DTH is well positioned to capitalise on incremental growth in digitisation and new TV penetration in Tier 3 and 4 towns and rural areas,” Warburg Pincus India, MD and co-head, Vishal Mahadevia said.

While it inducts Warburg Pincus into the DTH business, there is growing speculation of potential engagement between Airtel and Tata Group’s DTH operations after their decision to merge telecom businesses.

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