After the recent high-profile merger between Reliance Jio and Disney Star, it seems like another major consolidation is on the horizon, this time in India’s Direct-to-Home (DTH) sector. Think of India’s DTH industry as a high-stakes chessboard. For years, Tata Play and Airtel Digital TV have moved their pieces carefully, competing for dominance in a game that’s getting tougher with every turn. But now, with the rise of OTT platforms and changing consumer habits, the board itself is shifting. Instead of battling each other, these two major players are considering a merger—an unexpected but potentially game-changing move. On Wednesday, February 26, Bharti Airtel officially confirmed that it is in talks with the Tata Group to explore a potential merger of Tata Play’s DTH business with its subsidiary, Bharti Telemedia Ltd. The Sunil Mittal-led telecom giant disclosed this development in a regulatory filing, following reports indicating that the merger is likely to be structured as a swap deal. The question is: Is this a brilliant strategy to checkmate competition or a desperate attempt to stay in the game?
The urgency behind this move becomes clearer when considering the steady decline of India’s DTH sector. The total active subscriber base dropped by 2.26 million in Q3 2024 alone, falling from 62.17 million in June to 59.91 million in September, as per the Telecom Regulatory Authority of India (TRAI). Between September 30, 2023, to September 30, 2024, the sector has lost 4.27 million subscribers, highlighting a clear shift in viewing habits as more audiences migrate to digital streaming.
According to reports, this potential merger, valued at approximately $1.6 billion, is expected to give Bharti Airtel a majority stake of over 50% while Tata Play’s existing shareholders, including Walt Disney, will retain the remaining shares. If the deal materialises, it might create a powerhouse in the DTH space.
But as Tata Play and Airtel Digital TV merge, what will it mean for the broader TV industry? How will it impact competition, pricing, consumer choices, and the future of Pay TV in India? More importantly, can this consolidation help arrest the decline of traditional TV subscriptions in a landscape that is increasingly shifting toward digital? These are the critical questions shaping the next phase of India’s television industry. 
Ashish Sehgal, Chief Growth Officer, Digital & Broadcast Revenue, ZEE Entertainment Enterprise Ltd., highlights that the merger will give the combined entity the scale needed to invest in new technologies, ultimately benefiting consumers. He explains, “With their expanded reach, estimated to be around 20 million households post-merger, they will be in a stronger position to offer distinct packaging, better marketing rights, and a unified communication strategy. Rather than competing against each other, the two companies can now focus on enhancing value-added services and potentially expanding the reach of linear TV connections.” Sehgal also notes that bundling OTT services into their offerings is a likely move, given their extensive subscriber base.
He further adds, “The merger brings them closer to telecom players in terms of bundled offerings. With Airtel’s broadband services in the mix, the company gains a competitive edge against Jio, strengthening its content distribution network.” From a strategic standpoint, this positions them well in the market. Additionally, from a pure linear Pay TV perspective, Sehgal believes the merger could have a positive impact. He suggests that by offering attractive pricing and bundled services, it might even slow the trend of cord-cutting.
IMPACT ON TV
The announcement of Tata Play and Airtel Digital TV’s potential merger has already sparked ripples in the market, with Bharti Airtel’s stock seeing a modest uptick. While investors weigh the long-term implications, the broader television industry is bracing for a major shift. The DTH sector, already struggling with a shrinking subscriber base, will see its landscape further contract, as the number of key players reduces from four to just three.
This consolidation could give the merged entity greater bargaining power with broadcasters, potentially reshaping pricing negotiations and carriage fees. Will this put additional pressure on content providers, or will it create new opportunities for bundled services that make Pay TV more attractive in the age of streaming?
“The deal is still in its early stages, but it could have a slightly negative impact on the industry. The DTH sector is already dominated by just four major players, and this merger would further reduce that number down to three. As a result, broadcasters might face even greater pressure, making it a challenging space for them, especially given the ongoing decline of the DTH industry. If you look at subscriber trends, the numbers have been steadily decreasing across DTH, Pay TV, and Cable. With further consolidation, broadcasters could struggle even more in terms of pricing power,” shares a Research Analyst.
Echoing a similar perspective, Vanita Keswani, CEO, Madison Media Sigma, Madison World, explains that the traditional DTH market has been struggling due to declining subscriber growth, rising content costs, and the shift toward OTT platforms. The merger highlights the intense pressure, the competition, and the consolidation trends within India’s entertainment sector. “This move suggests that standalone DTH services must find new ways to remain profitable in the long run. For the TV industry as a whole, it signals an era where fewer but stronger players will dominate, potentially offering bundled services that combine DTH with broadband and OTT,” she states.
Keswani further shares, “The merger could lead to operational efficiencies, which might help control costs in the short term. However, with fewer competitors in the DTH space, there’s a possibility that subscription prices may rise over time. On the other hand, bundling Pay TV with OTT services and broadband (similar to Jio’s strategy) could make pricing more attractive for consumers. The impact on pricing will depend on regulatory oversight and competitive responses from players like Jio and Dish TV.”
“A merger will increasingly become a profit centre for the combined entity. With the larger subscriber base, negotiations with pay-TV broadcasters will become more favourable, creating an extra margin that could be passed on to subscribers to attract more customers from competing DTH or MSO providers, thereby increasing the overall subscriber count,” states Manish Singhal, Managing Director, Enterr10 Television Network.
Akshat Singhal, Head - Dangal Play, Enterr10 Television Network, explains that a higher level of competition typically leads to a better market environment. But with this consolidation, the competition will decrease, which could potentially shrink the market. However, he also adds that the TV industry as a whole may not be significantly affected. “Competition provides viewers with more choices and promotional offers, and with fewer players, overall DTH sales are likely to decline. Carriage fees may not see a significant rise, but the profitability for Tata and Airtel is expected to increase,” states Singhal.
“From a broadcaster’s perspective, this consolidation opens up opportunities to launch subscription-only channels. Currently, securing distribution is challenging as one DTH operator may support a new channel while another may not, making it unfeasible due to limited reach. With a single large player, the market becomes more viable for such offerings. Meanwhile, as FAST (Free Ad-Supported Streaming TV) channels grow on CTVs, DTH services could simultaneously introduce exclusive subscription-driven channels with unique content,” highlights Sehgal while adding that the merger effectively creates a two-player scenario in the DTH space, with Dish TV as the only other major competitor. “This shift enhances the bargaining power of the merged entity, not only with broadcasters but also in negotiating with consumers. A consolidated player with strong offerings could attract consumers looking to upgrade from cable or even migrate from Free Dish, further strengthening its market position,” he further explains.
FROM THE PAST
Industry consolidation is not new to the Indian DTH market. A notable precedent was the 2016 merger of Dish TV and Videocon d2h, which created India’s largest DTH operator at the time. However, with changing consumer preferences and the rise of over-the-top (OTT) platforms, the DTH industry faces new challenges that such mergers aim to address.
Manish Singhal believes that the merger between Tata Play and Airtel DTH is largely a survival strategy in a shrinking market where premium content is increasingly available on free platforms. He explains, “It could be seen as a dual-play strategy, but we must remember that the merger between Dish TV and Videocon d2h happened in a much stronger market compared to today’s scenario.” He further emphasises that if broadcasters and content owners choose to keep their premium content behind paywalls, whether on OTT or broadcast, both platforms can continue to coexist, especially given India’s vast consumer base. Reflecting on previous mergers, he notes that heavy capital expenditure on technology upgrades, such as the shift from MPEG-2 to MPEG-4 and HD transitions, put pressure on cash flows as companies strived to retain customers.
Keswani points out that the Dish TV and Videocon d2h merger demonstrated how operational synergies can be achieved, but customer retention remains a challenge without continuous innovation. She explains, “The lesson here is that mergers alone won’t guarantee survival; companies will need to focus on innovative integrated service offerings, better pricing strategies, and seamless user experiences to bring about true benefits to all.” She further notes that this merger underscores the growing convergence in India’s entertainment landscape. However, she cautions that with this shift, “measurement and media planning become yet more complex.”
As the Pay TV sector continues to battle the rise of OTT, the potential merger could accelerate the adoption of hybrid models that bundle DTH, broadband, and streaming services. Whether this merger reinvigorates traditional TV or further fuels digital migration remains to be seen, but one thing is certain - the game is changing and only the smartest players will remain on the board.
