Amazon In Talks To Buy $2 Billion Stake In India's Bharti Airtel

Amazon.com Inc. is purchasing a stake in the second biggest telco in India - Bharti Airtel Ltd - to the tune of $2 billion, Reuters reported. The move puts the retail giant among the ranks of Facebook Inc. and other US companies in investing on one of the most successful internet markets in the world.

The American online retailer is in preliminary talks, citing sources who requested anonymity, to acquire around a 5 percent ownership in the Indian wireless company. A contract would help Amazon access the 300 million subscribers of Bharti - a market that has nearly the same size of the entire American population.

This report comes following the 10 percent acquisition of Facebook in Reliance Jio recently, and a report that disclosed even online search giant Google is considering investing in Vodafone Idea.

Before the start of the pandemic-triggered shutdowns, the telecom business was in a precarious position. But the increase in reliance on mobile data proved to be a major boon for telco firms who enjoyed a huge surge in ARPU as data usage is on the rise. 

Bharti Airtel operates the music streaming service Wynk Music, a competitor of Gaana and JioSaavn streaming services based in India and, Spotify, which continues to pose a major compeition in the major local firms in the industry.

As reported by MBW last month, another music streaming platform's parent company, JioSaavn, has also recently taken on an investment from a US tech giant. Jio Platforms, owned by JioSaavn and giant telco RelianceJio, recently raised more than $6 trillion from Facebook and Silver Lake.

Amazon already has deep connections in India and considers the nation to be a very important market for growth. Chief Executive Officer Jeff Bezos has visited and promised to create one of his largest e-commerce operations outside the US, and has also pledged $6.5 billion in investments to broaden his e-commerce foothold.

Now the richest man in the world, Bezos' Seattle-based company has also expanded its digital offerings in India in recent years through voice-activated speakers, streaming and Cloud technology, as the group seeks to tap an increasing volume of Internet and smartphone users in the country of 1.3 billion people.

An inflow of investment would be very beneficial to the New Delhi-based Bharti Airtel, which has been under pressure to boost its offerings since Ambani's technology venture went on a spree deal to secure about $10 billion in Facebook-to-KKR & Co investment.

Airtel's chairman, Sunil Mittal, may seek to leverage his business empire's diverse portfolio just as Ambani goes into full gear to turn his oil and petrochemicals ventures into an Indian e-commerce and digital payments behemoth with Jio Platforms.