Bharti Airtel and Tata Play Merger: What it Means for DTH Industry

When was the last time you spent quality time watching television? No, it’s not about Netflix after work. But the old-school way, flipping through channels, catching a live cricket match, or enjoying a comedy show?

You may not be able to remember. Because, India’s Direct-To-Home (DTH) industry has been facing a decline as viewers increasingly shift towards digital streaming. With a declining subscriber base and growing competition from Over-the-Top (OTT) platforms like Netflix, Amazon Prime and JioCinema, major DTH players are looking for ways to stay profitable.

As of September 2024, India had approximately 59.91 million active DTH subscribers, a noticeable drop from 62.17 million in June 2024, according to Telecom Regulatory Authority of India. Amid this, two of India’s largest DTH providers -- Bharti Airtel and Tata play -- are reportedly in the advanced stages of talks for a merger.

So, what does this deal mean for the future of DTH? Will it be a survival strategy or a turning point for the industry? Let’s find out below.

Understanding the Proposed Merger

The Airtel Digital TV-Tata Play merger is expected to be a game-changer in India’s pay-TV sector. Here’s Why.

• Merger Structure: The deal will be executed through a share swap arrangement.

• Ownership Breakdown: Airtel is set to hold a majority stake of around 52-55%, while Tata Group and Walt Disney, existing stakeholders in Tata Play, will retain 45-48%.

• Valuation: Both companies are valued at ₹6,000-7,000 crore, making the combined entity a major player in the Indian DTH market.

• Subscriber Base: The new entity will have a combined subscriber base of over 35 million users, strengthening its position against competing DTH and OTT platforms.

This deal follows past industry consolidations such as the Videocon d2H-Dish TV merger in 2018.

Why the Merger is Happening

The deal is a strategic response to several challenges in the DTH industry:

Declining DTH Market

India’s DTH sector is struggling to retain users as OTT platforms gain widespread popularity. With affordable data and flexible content options, streaming services such as Netflix, Amazon Prime and JioCinema are drawing customers away from traditional satellite TV.

Revenue Strategy

• For Airtel: The company is actively expanding its non-mobile revenue streams by integrating broadband, telecom and DTH services under a single umbrella.

• For Tata Play: The company has faced financial pressure, with its valuation declining from $3 billion pre-pandemic to around $1 billion. Mounting losses and a stagnant user base have made a strategic partnership necessary to stay afloat.

Industry Trends

India’s telecom and media space has witnessed a broader trend of mergers and acquisitions in recent years. Some examples are…

• Dish TV and Videocon d2h merger in 2018.
• Reliance Jio’s acquisition of Disney’s India streaming business, rebranding it as Jio Hotstar in 2024.

With Jio strengthening its bundled offerings and integrating broadband with OTT services, traditional DTH players are feeling the heat.

Potential Impact on DTH Industry

Reduced Competition

The merger will reduce competition in the DTH space, paving the way for further industry consolidations. Smaller DTH operators may either seek partnerships or exit the market entirely as larger players strengthen their positions.

Competitive Positioning

With 35 million combined subscribers, the merged entity will emerge as a dominant force in the Indian DTH sector. Airtel’s ability to provide multiple services such as telecom, broadband and television services under one umbrella can help the company retain users.

Regulatory Considerations

The Competition Commission of India (CCI) is likely to review the deal closely. The merger could lead to conditions such as price caps or mandatory asset divestment to ensure fair competition in the DTH industry.

Consumer Impact

For subscribers, the merger could bring both opportunities and challenges:

Potential Benefits

• Better Service Quality: Increased investment in infrastructure could enhance satellite signal reliability and customer support.

• Bundled Plans: The merged entity could offer discounted packages that combine broadband, telecom, and TV services, making them more attractive than standalone DTH subscriptions.

• Expanded Content Options: Collaboration with content providers may result in more diverse entertainment choices, including exclusive partnerships with OTT platforms.

Possible Drawbacks

• Price Adjustments: Consolidation may lead to higher subscription costs over time, especially if the number of competitors decreases.

• Technological Integration Issues: Combining Tata Play and Airtel’s satellite systems may lead to temporary service disruptions during the transition period.

• Reduced Consumer Choice: With fewer DTH providers, consumers may have limited options, making them more dependent on a single service provider.

Conclusion

The Airtel-Tata Play merger marks a significant shift in India’s DTH industry, signalling how traditional players are adapting to survive in a digital-first world. As OTT platforms continue to dominate, this merger could reshape content consumption by integrating TV, broadband and telecom services under a single umbrella.

For consumers, this could mean better service offerings, competitive pricing and seamless entertainment experiences. However, with regulatory hurdles and industry disruptions ahead, it remains to be seen whether this consolidation is enough to future-proof the DTH industry or just a survival strategy.