Preparation for a very interesting corporate battle is taking place right now in India, in the competitive yet lucrative cable industry.
India’s biggest DTH player: Dish TV, and 3rd biggest DTH player: Airtel is in the final stages of finalizing the gameplan to create world’s largest DTH operator.
Once that happens, then Reliance Jio’s upcoming cable services will be challenged with full force.
This is the fight for claiming the top spot, and to stop Jio from disrupting cable industry.
Who will win here?
Airtel’s Corporate Battleplan To Dominate DTH Market
Airtel’s objective here is to acquire Dish TV and create world’s largest DTH firm.
To start with, Airtel, along with Singapore Telecommunications and Warburg Pincus will join their forces, and acquire 61% stake owned by Subhash Chandra’s family in Dish TV.
Once that happens, Airtel will make an open offer to acquire 26% in Dish TV, which is held by private investors.
But that’s not the end.
Once the consortium of Airtel, Singapore Telecommunications and Warburg Pincus owns a majority stake in Dish TV, then Airtel DTH, which is owned by Airtel Telemedia, will be hived off, and via a reverse-merger, combined with Dish TV.
Talks are currently on, regarding the valuation of Dish TV, and Rs 50 per share is number which is coming out.
A person close to the talks said, “The negotiations (for Dish TV) are around the valuations, with an expected offer at over Rs 50 a share for the promoter stake,”
Zee Group Looking For A Financial Relief
Meanwhile, there is another angle to the whole picture as well.
Essel Group owned Zee Group is currently reeling under heavy debt of Rs 17,000 crore, and they are looking for immediate relief.
And Airtel’s preparation to take over Dish TV can be the most appropriate thing right now.
Selling off 87% of Dish TV at Rs 50 per share will mean that Airtel-led consortium will pay $1.5 billion to Zee Group for acquiring Dish TV, and this will solve a lot of problems for Subhash Chandra.
Note here, that founder Subhash Chandra has already pledged 82.05% of their holding in Dish TV and 59% of their stake in Zee Entertainment to lenders, and a major stake in Zee Entertainment will also be sold out.
This deal will enable Essel Group to sell out DIsh TV’s debt of Rs 3100 crore via this acquisition.
Jio’s Onslaught Will Be Countered By Airtel-Dish TV?
Jio is preparing hard to launch their Jio Gigafiber services, which will combine high-speed broadband services with DTH services, accessed via mobile and TV.
Jio has already acquired Hathway and Den, which means that they already have command over 35% of cable users in India, which is 24 million households across 750 cities.
Meanwhile, once Airtel-Dish TV deal is done, they will command 61% of the market share, as 38 million users will be under their network, which will be the world’s biggest such network ofDTH service.
Both Airtel and Jio is aiming for urban locations first, followed by tier 2 and tier 3 cities.
We will keep you updated, as more details come in.
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