The transaction will also provide Bharti Airtel the right to use Tata's existing fibre network. As part of the deal, Airtel will absorb Tatas' consumer mobile business in 19 circles. It will also enable Airtel to bolster its strong spectrum foot-print with the addition of 178.5 MHz spectrum, according to a company statement.
Tata Teleservices, the mobile business, was weighed down by huge debt, spectrum liability and monthly cash losses. Finding the right home for our longstanding customers and our employees has been the priority for us. "We have evaluated multiple options and are pleased to have this agreement with Bharti", said N Chandrasekaran, Chairman, Tata Sons. Tata employees will be demerged on the lines of the two businesses CMB and EFL (Enterprise and Fixed Line and Broadband), and will be moved after an optimal manpower planning. It may also emerge as the preferred telecom partner for the Tata Group, executives said. The Indian conglomerate agreed to withdraw its objection to the enforcement of an global arbitration court's $1.17 billion award to Docomo over a dispute surrounding the terms of the Japanese company's exit from the partnership.More news: 'Breaking Bad' Fans Keep Throwing Pizza on Walter White's House
The strategy overall is part of Tata Groups plan to find a solution for the troubled mobile business of the conglomerate. Since Chandrasekaran took charge in February, monetizing assets, paring debts, and simplifying the group's cross-holding structure has been high on the agenda.
The acquisition will be on a cash-free debt-free basis. Idea has 191 million users as of August.
Tata will retain its stake in tower company Viom, and will take care of the liabilities associated with it, according to the statement.More news: India's industrial growth clocks nine-month high of 4.3% in August
Tata Teleservices is one of the most awarded that includes Tata Docomo and Tata Photon. For them it was a choice between whether you shut it down completely or merge with a player. Tata Teleservices Limited, along with Tata Teleservices (Maharashtra) Limited has a wide presence across key geographies, spanning over 19 telecom circles and operations in towns and villages across the country.
A Bharti Airtel office building is pictured in Gurugram, previously known as Gurgaon, on the outskirts of New Delhi, India April 21, 2016. Reliance Jio Infocomm is luring customers with free voice calls and ultra-low data rates. This will surely come in handy for posing formidable challenge to Mukesh ambani owned Reliance Jio.
Vodafone Group and Idea Cellular - the market's second and third biggest players, respectively, are in the process of combining their operations to create the market's biggest player, while Bharti Airtel had previously agreed to buy Telenor's India unit.More news: United States to pull out of UNESCO
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