Airtel TV valuation at $1.75 bn as Warburg Pincus picks up 20% stake


MUMBAI: Confidence in the TV distribution sector seems to be returning, the OTT euphoria notwithstanding. Bharti Airtel today announced that it has struck a deal with Warburg Pincus under which an affiliate of the global private equity firm will acquire a 20 per cent equity stake in its DTH arm which operates under Bharti Telemedia Ltd.

The cost of the acquisition: $350 million. 15 per cent of this will be offloaded by Bharti Airtel while the remaining five per cent will come from another affiliate of India’s largest telecom operator.

Bharti Telemedia has 14 million subscribers for its DTH service under the Airtel TV brand which places it among the top three players in India, after Dish TV-Videocon and Tata Sky. The other players in the satellite TV operating space are FTA service FreeDish – run by pubcaster Doordarshan and Sun Direct which is operated by south Indian media powerhouse Sun TV network.

In the year ending 31 March 2017, Airtel TV had average revenues per user per month of Rs 231 and it reported overall revenues of Rs 3430.6 crore for the period. In Q2 ended 30 September 2017, it turned out a top line of Rs 936.9 crore.

Bharti Airtel had roped in former Mondelez vet Sunil Taldar in December 2016 as CEO & director DTH and a member of the company’s board with a direct reporting line to the company’s MD & CEO-south Asia Gopal Vittal. He had then replaced Shashi Arora who had run the DTH unit for five years before being mandated to run its payments bank.

Airtel Digital TV has 1,500 partners all over India with 158,000 recharge points in 630 districts.

The acquisition price of $350 million values Airtel’s DTH arm at $1.75 billion, which is by no means something to sniff at in this sector. Dish TV-Videocon d2h had a valuation of $2.7 billion at the time of the merger announcement of the two operators a year and a half ago.

What attracted Warburg Pincus to invest in Airtel’s DTH business? Its India managing director and co-head Vishal Mahadevia explains, “The Indian digital TV market is expanding rapidly and we believe Airtel DTH is well positioned to capitalise on the incremental growth in digitisation in tier 3 and tier 4 towns and rural areas. We look forward to working with Sunil Bharti Mittal and Bharti group again after our successful partnership years ago and we look forward to supporting the management team in the next phase of the company’s growth.”

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