Amazon in talks to acquire 5% stake worth $2 Bn in Bharti Airtel: Report

Global tech giants are eyeing to acquire a significant stake in Indian telecom companies. After the Facebook-Jio deal, Google was reportedly in talks with Vodafone Idea to acquire a 5% stake. Now e-commerce behemoth Amazon is eyeing around 5% stake in Bharti Airtel.

According to a Reuters report, Amazon will invest about $2 billion in India's third-largest telecom company with over 300 million subscribers.

The talks are at an early stage and the deal terms between Airtel and Amazon could change, or an agreement may not be reached, added the report.

Responding to Entrackr's query, an Amazon spokesperson said "we do not comment on speculation of what we may or may not do in future."

According to Airtel, the company routinely works with all digital and OTT players and has deep engagement with them to bring their products, content and services for its wide customer base. Beyond that there is no other activity to report.

Soon after the news broke, Bharti Airtel’s stock price jumped 4.3% from Rs 559 at 3:20 pm to Rs 583.25 at 3:30 pm.

The development comes at a time when Reliance Industries Limited-owned Jio has already secured an aggregate investment of Rs 78,562 crore from 5 leading technology investors, Facebook, Silver Lake, Vista, KKR and General Atlantic. 

Jio has diluted around 17.12% stake in the aforementioned five deals.

Apart from the above two deals, Google reportedly held investment talks with Vodafone but the company denied such talks in a statement to stock exchanges. 

The telecom sector in India has turned attractive for large strategic investors as they are the best channel to acquire millions of customers overnight, gain intelligence and most importantly, tap into mature digital platforms servicing a large market.

While most of the players have been bleeding profusely because of Jio’s aggressive push and falling ARPUs. If Airtel and Vodafone finally corner deep-pocketed backers like Amazon and Google, they would be in a better position to counter the Reliance-Facebook alliance.

The investment in cellular network companies will help tech giants ramp up their stakes in digital infrastructure in India where a large chunk of internet users are powered by mobile Internet, not broadband or fibre. The coronavirus pandemic seems to have brought a demonetisation-like moment for the cellular networks.