Online retail giant Amazon is reportedly in talks with Indian mobile operator Bharti Airtel to buy a stake worth at least $2 billion. According to a Reuters report, the deal is expected to “turbocharge” India’s digital economy.
If the alleged transaction comes through, Amazon would roughly acquire 5% stake in the country’s third largest telecom company. The deal will also bear fruitful results for Airtel as it seeks to lock horns with Mukesh Ambani-led Reliance Jio.
According to one of the sources mentioned in the report, Jio has transformed itself from a pure mobile operator to a digital technology-led consumer facing platform, and Airtel can do the same. Airtel is looking to play a catch-up game here, and for Amazon it makes all the strategic directional sense for the India business.
The talks between Bharti and Amazon are at an early stage and the deal terms could change, or an agreement may not be reached, said the report.
If talks to buy a stake fail, the companies could also look at a commercial transaction that could give Bharti’s customers cheap access to Amazon products, one of the people said. Amazon currently offers its Amazon Prime membership free to Airtel’s postpaid users under Airtel Thanks.
While an Amazon spokeswoman said the company does “not offer comments on speculation of what we may or may not do in future,” Bharti said they routinely work with all digital players to bring their products, content and services to customers.
The discussions between Amazon and Bharti underscore the attraction of India’s digital economy for U.S. tech giants. In the past weeks, Reliance’s Jio Platforms has raised $10bn from Facebook, General Atlantic and KKR to establish itself as a one-stop digital commerce platform in India. Jio is also looking for a potential IPO in the United States, most probably Nasdaq.
There have also been various reports about Google parent Alphabet Inc exploring an investment in Vodafone Idea, a joint venture between Britain’s Vodafone Group Plc and India’s Idea Cellular.
A deal with Bharti could help Amazon expand offerings via its smart speakers and also boost its cloud business as access to Bharti’s vast telecom fibre network could help Amazon lower costs. Reliance’s Jio has already partnered with Microsoft for use of its Azure cloud platform.
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