Bharti Airtel: DTH stake sale

Bharti Airtel recently sold 20 per cent stake in Bharti Telemedia, its direct to home (DTH) arm, to private equity firm Warburg Pincus. The sale consideration for the deal was ₹1,624 crore. For Warburg Pincus, the stake buy gives it a foothold, through a key player, in the high-potential DTH market. Bharti Airtel, while still retaining 80 per cent in Bharti Telemedia, adds to its coffers amidst the ongoing telecom sector consolidation.

Bharti Telemedia’s DTH customer base increased from 27 lakh in March 2008 to 1.3 crore as of March 2017. Growth in average revenue per user (ARPU) has been stagnant, though, in recent times. In the September 2017 quarter, the ARPU stood at ₹233 compared with ₹232 in the year-ago period.

But customer growth has seen the DTH business report a revenue increase of 10 per cent y-o-y to ₹936 crore in the September 2017 quarter. The operating margin improved to 37.5 per cent from 35.5 per cent in the year-ago period.

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