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MUMBAI: India's largest telecoms operator, Bharti Airtel, has shelved plans to sell a large stake in its direct-to-home (DTH) business Airtel Digital TV after talks failed with financial and strategic investors, sources directly familiar with the matter told TOI. Sunil Mittal-led Bharti was negotiating to sell at least 25% in the DTH unit valuing it about $1.5 billion, however, the telecoms-to-retail group was unable to get the desired valuation from prospective buyers, which included Los Angeles-based investment firm Saban Capital, PE firm Carlyle and Liberty Media. The stake sale move was part of Bharti's deleveraging plan after being saddled with billion dollars of debt accumulated after the acquisition of Zain's African operations and spends on 3G spectrum bidding.
Bharti has considered multiple options-DTH stake sale, divestment of African towers and exit from Sri Lanka-at the right valuations to pare its debt of $9.5 billion. It has received expressions of interest from potential acquirers for its telecom towers in Africa, valued at more than $2 billion. The telco raised funds in May this year by selling a 5% stake to the Qatar Foundation Endowment for $1.26 billion
A Bharti spokesperson declined to comment when contacted by TOI.
Airtel DTH has 8.6 million subscribers with a market share of about 18% behind DishTV and TataSky. A banking source said Bharti is looking to scale the business over the next couple of years before it takes a call to sell the stake.
The DTH industry revenues will reach $ 3.9 billion by 2017 from $1.4 billion in 2012 with a 32-million subscriber base and $ 5.3 billion by 2020.
Revenue growth will be largely driven by increasing subscriber volumes, Hong Kong-based research firm Media Partners Asia said in a report on the Indian DTH market.
"DTH is seeing new subscribers coming in due to cable digitization being rolled out which means there is scope for organic growth in the industry. There are attempts by players to consolidate but that looks likely to happen only once the growth rates taper," said Jehil Thakkar, KPMG's head of Media & Entertainment.
Another much-talked about deal between Sun DTH and Reliance BigTV has also been stuck for a while, indicating that consolidation among DTH players is still sometime away.
Source: TOI
Bharti has considered multiple options-DTH stake sale, divestment of African towers and exit from Sri Lanka-at the right valuations to pare its debt of $9.5 billion. It has received expressions of interest from potential acquirers for its telecom towers in Africa, valued at more than $2 billion. The telco raised funds in May this year by selling a 5% stake to the Qatar Foundation Endowment for $1.26 billion
A Bharti spokesperson declined to comment when contacted by TOI.
Airtel DTH has 8.6 million subscribers with a market share of about 18% behind DishTV and TataSky. A banking source said Bharti is looking to scale the business over the next couple of years before it takes a call to sell the stake.
The DTH industry revenues will reach $ 3.9 billion by 2017 from $1.4 billion in 2012 with a 32-million subscriber base and $ 5.3 billion by 2020.
Revenue growth will be largely driven by increasing subscriber volumes, Hong Kong-based research firm Media Partners Asia said in a report on the Indian DTH market.
"DTH is seeing new subscribers coming in due to cable digitization being rolled out which means there is scope for organic growth in the industry. There are attempts by players to consolidate but that looks likely to happen only once the growth rates taper," said Jehil Thakkar, KPMG's head of Media & Entertainment.
Another much-talked about deal between Sun DTH and Reliance BigTV has also been stuck for a while, indicating that consolidation among DTH players is still sometime away.
Source: TOI
