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HomeUncategorizedAirtel and Hughes to merge their VSAT operations in India

Airtel and Hughes to merge their VSAT operations in India

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According to Bharti Airtel, the combined entity will introduce new VSAT and related technologies to deliver a wide range of quality products and service, while it will continue to serve its existing customers
Telecom major Bharti Airtel and Hughes Communications India Ltd (HCIL) on Tuesday announced the merger of their VSAT (Very Small Aperture Terminal) satellite communications operations in India. The companies, however, did not disclose the financial details of the transaction, which is subject to approvals by relevant authorities.

According to the agreement, Hughes will have majority ownership in the combined entity and Sunil Mittal-led Airtel will have a significant shareholding.

HCIL, a subsidiary of Hughes Network Systems, is one of the leading broadband satellite service operator in India. It provides a wide range of broadband networking technologies, solutions, and services for businesses and governments.

“The combined entity will benefit from enhanced scale, improved operational efficiencies and wider market reach. It will be well positioned to leverage the demand for secure connectivity in a rapidly growing digital economy,” Bharti Airtel said in a filing to the Bombay Stock Exchange.

A very small aperture terminal (VSAT) is a satellite communications system which is used to provide telecom and internet access to individuals and enterprise users. It is widely used by banks and ATMs.
The combined entity will introduce new VSAT and related technologies to deliver a wide range of quality products and service, while it will continue to serve its existing customers, Bharti Airtel said in the exchange filing.

Also Read: Reliance Jio effect: Bharti Airtel FY19 profit halves to Rs 168.75 crore

Commenting on the development, Ajay Chitkara, Director and CEO, Airtel Business said: “We are pleased to combine our VSAT operations with Hughes to serve the connectivity needs of Digital India. The partnership will bring amazing synergies to the forefront and combine the proven capabilities of both the companies. Customers can look forward to highly secure and reliable connectivity solutions across the length and breadth of India.”

“We are very excited about the synergies that this partnership will bring to the Indian ecosystem. These are exciting times for satellite broadband service providers as VSAT becomes more mainstream, driven by growing demand from both, enterprise and government segments”, said Partho Banerjee, President and Managing Director, Hughes Communications India Ltd.

The Bharti Airtel’s board on Monday approved the composite scheme of arrangement between Bharti Airtel Services, a subsidiary of Bharti Airtel, and HCIL for transfer of the VSAT business by way of a slump sale.

Meanwhile, Bharti Airtel share price were trading 3.10 per cent lower at Rs 323.05 apiece on the BSE after the telecom major reported 62.7 per cent year-on-year decline in its consolidated net profit at Rs 409.50 crore for the financial year 2018-19, dented by a continuing tariff war with Mukesh Ambani’s Reliance Jio.

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