Airtel, Hughes to merge broadband satellite units

Bharti Airtel and Hughes Communications India will combine their very small aperture terminal (VSAT) operations in India, which the companies say will improve services for enterprise and government networks

May 7, 2019

The companies said that the merger will help better serve the Digital India mission by improving solutions for businesses and governments

Airtel said that the combined entity will be able to introduce new VSAT and related technologies to deliver a variety of products and services

India’s telecoms market attracted fDI worth US$6.2 billion during the financial year 2017-18 - a nearly five fold jump from 2015-16

While India’s teledensity has risen from 75 per cent in 2014 to 93 per cent in 2018, internet coverage has seen 107 per cent increase

Bharti Airtel Ltd and Hughes Communications India Ltd announced on May 7 that they would combine their broadband satellite, or very small aperture terminal (VSAT), operations in India. While Airtel is one of India’s largest integrated telecommunications companies along with operations in 20 countries in South Asia and Africa, US-based Hughes Communications provides high-speed satellite internet service and is a sector leader in India. Hughes will control majority ownership in the combined entity, and Airtel will have a significant shareholding, the latter said. Airtel added that the merged entity will benefit from “enhanced scale, improved operational efficiencies and wider market reach”. The companies said that the merger will help better serve the Government’s Digital India mission.

Hughes provides a range of broadband networking technologies, solutions, and services for businesses and governments. Airtel said that the combined entity will be “able to introduce new VSAT and related technologies to deliver a wide range of products and services”. It will offer secure and reliable broadband satellite and hybrid solutions for enterprise and government networks. Currently in India, satellite is an important layer in the enterprise networks across all kinds of industries – from retail to petroleum to banking to military. Owing to its promises, India’s telecoms market attracted foreign investment worth US$6.2 billion during the financial year 2017-18 – a nearly five fold jump from 2015-16.

The National Telecom Policy 2018 has envisaged investments worth US$100 billion by 2022. Given the rapid expansion of user base, India’s telecommunications industry saw strong activity in 2018.

A six-fold increase in Government spending on telecom infrastructure and services across the country to US$8.4 billion between 2014-19 has sought to further propel this growth. Hence, India has emerged as the world’s second-largest telecom market with a subscriber base of 1.2 billion. While overall teledensity has risen from 75 per cent in June 2014 to 93 per cent in March 2018, internet coverage has reported an over 107 per cent increase – from 251 million users in June 2014 to 512 million in June 2018. Meanwhile, India currently has the world’s most affordable data prices. Besides empowering government services over digital platforms, this has opened up a range of business opportunities.

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