India’s booming telecom market has caught the interest of one more US firm. E-commerce giant Amazon.com is reportedly seeking to pick up stake in India’s third-largest telecom operator Bharti Airtel.
Media reports say that Amazon is in talks to buy 5% stake, worth around US$2 billion, in the Indian telecom company. Both companies have refused to confirm the report. Bharti Airtel has clarified that it works with digital and over the top platforms from time to time, but has no other activity to report. It is trying to integrate tech and telecom to build a digital platform to take on rival Reliance Jio.
Earlier in the last week of May, Bharti Airtel’s lead promoter Bharti Telecom had sold 2.75% stake in the secondary market. Through the stake sale, Bharti Telecom, which is owned by Sunil Mittal-controlled Bharti Enterprises and SingTel, has raised $1.15 billion, in order to reduce its debt. The sale was over-subscribed and investors included hedge funds from India, Asia, Europe and the US.
Amazon’s reported move comes in the wake of Facebook buying 9.99% stake in Jio Properties, the parent of Reliance Jio – the largest telecom operator by subscribers. In addition to Facebook, four private equity players – KKR, Silver Lake, Vista Equity and General Atlantic – have recently invested in Jio Properties. The aggregate investments by these companies amount to 785.62 billion rupees ($ 10.40 billion).
There are also reports that Microsoft is also in talks with Jio Platforms and could invest as much as $2 billion. The parent company of Jio Platforms, Reliance Industries, is aiming to be debt free by early next year.
Earlier there were reports that tech giant Google is holding talks to buy a stake in Vodafone Idea, the second-largest telecom operator in India. An investment from Google will improve Vodafone Idea’s chances of survival. The company’s debts have been mounting and this problem has been exacerbated by the Indian Supreme Court’s ruling on adjusted gross revenue computation norms. It now has to pay fees of around 530 billion rupees ($7 billion) to the telecom department.
Amazon has invested over $6.5 billion in India, and apart from e-commerce, it offers over the top streaming platform Prime Videos, voice-activated speakers, among other offerings. Amazon also leads the cloud market in the country. However, it currently does not maintain any deal with a telecom operator.
But other American players have formed multiple partnerships with telecom operators in India to expand their reach in the Indian market. Microsoft has a partnership with Reliance Jio to bring Office 365 to millions of small businesses at a subsidized cost. Google maintains a similar partnership with Airtel for its Google Cloud suite.