Tata group looks to revive telco arm

The loss-making Tata Teleservices could provide technical support and enterprise solutions for the Tata group’s upcoming SuperApp, which is all set to launch before the year-end. The Tata group aims to bring all its products and services into a single app called SuperApp.

The onboarding of Tata Teleservices for providing technical solutions to SuperApp is also expected to revive the telco arm’s business. Despite a fund infusion worth Rs 46,595 crore in over six years, Tata Teleservices and Tata Teleservices (Maharashtra) are yet to post sizable earnings.

After its demerger with Bharti Airtel, Tata Teleservices’ enterprise segment earned PBILDT (profit before interest, lease, depreciation and tax) of Rs 37 crore in Q1 this year. Its earnings stood at Rs 1,858 crore in FY20 and faced a total loss of Rs 13,325 crore.

“The SuperApp will require a technical backbone and Tata Teleservices will be able to provide this service. This will help Tata Teleservices to revive its fortunes,” Business Standard reported citing sources.

Tata Teleservices Limited, along with Tata Teleservices (Maharashtra) Limited, has a presence spanning over 19 telecom circles across the country. It offers integrated telecom solutions to customers across wirelines and wireless networks on GSM, CDMA, and 3G platforms.

Tata Group is aiming to up the ante in India’s digital space and take on rivals such as Reliance Jio, Amazon, and Flipkart by rolling out SuperApp.

With the app, the group is seeking to bring together its different consumer services for the first time. The app aims to provide its customers with a range of products and services offered by different platforms of Tata Group, including shopping app Tata CLiQ, grocery e-store StarQuik, and online electronics platform Croma.

Tata Group is currently in talks with potential investors to pick up stakes in the online platform and Walmart could pick up a large piece of the pie.

Reports say Walmart is also in talks with Tata Group to pump in $20-25 billion in Tata Group’s all-in-one app. The proposed ‘large’ stake could see Walmart pumping in $20-25 billion, overtaking its 66% stake purchase of Flipkart for $16 billion in 2018. If this follows through then the super app could be a joint venture between Tata and Walmart.

Tata Group already has its presence online with Tanishq jewellery stores, Titan watches, Star Bazaar supermarkets, a joint venture with Starbucks, Taj Hotels, Westside, Tata Cliq, Tata Sky, Croma, and StarQuik — all of which might be clubbed under the online platform. The group has the largest franchise of own-brands, as compared to Jio and Amazon.

Even as other heavyweights such as Reliance Industries Ltd (RIL) have aggressively pushed for technology in their businesses, Tata Group has largely remained muted in its consumer internet offerings. Since April 2020, billionaire Mukesh Ambani-led RIL has raised Rs 152,056 crore by selling a 32.97 per cent equity stake in Jio Platforms. Business Today