An Amazon deal would throw a lifeline to India’s Bharti Aitel

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Chalk up another potential win for Jeff Bezos… The Amazon CEO of Amazon will soon have a stake in India’s telecom giant Bharti Airtel.
Image Credit: AFP

New Delhi: Amazon.com Inc. is in preliminary talks to buy a stake in No. 2 Indian carrier Bharti Airtel Ltd. for at least $2 billion, joining Facebook Inc. and other US giants in betting on one of the world’s fastest-growing internet arenas.

The US online retailer is in early-stage discussions to buy about a 5 per cent stake in the Indian wireless operator, Reuters said. A deal will help Amazon access Bharti’s 300 million subscribers – a user base akin to the entire US population.

American technology and investment giants have been buying stakes in Indian companies to build their presence in Asia’s second-most populous nation. Facebook agreed to invest about $5.7 billion into a unit of Mukesh Ambani’s Reliance Industries Ltd. in April, while Microsoft Corp. is reportedly considering a stake in the same company.

Strike in deeper

Amazon already has deep roots in India, where CEO Jeff Bezos has visited and vowed to build one of his biggest e-commerce operations outside of the US. Bezos said during a trip in January that his company would invest another $1 billion on top of the billions it’s shelled out to bring small and medium-size businesses online.

Amazon is now vying with Walmart Inc.’s Flipkart to tap an increasingly affluent population adopting smartphones at a rapid clip.

“We routinely work with all digital and OTT players and have deep engagement with them to bring their products, content and services for our wide customer base. Beyond that there is no other activity to report,” a Bharti spokesperson said.

A coup of sorts

An influx of capital would be welcome to New Delhi-based Bharti Airtel, which has come under pressure to beef up its offerings ever since Ambani’s technology venture went on a deal spree to secure about $10 billion in investment from Facebook to KKR & Co.

Airtel’s billionaire Chairman Sunil Mittal may be looking to leverage the diverse businesses in his empire just as Ambani goes into overdrive to transform his oil-and-petrochemicals company into an Indian e-commerce and digital payments titan with Jio Platforms.

In its 25 years of operations, Bharti Airtel has survived frequent policy changes in one of the world’s toughest telecommunications markets. It lost its position as India’s largest wireless carrier last year to Ambani’s Reliance Jio Infocomm Ltd., which debuted in 2016 and shook up the industry with free calls and cheap data.

The most recent blow to Bharti Airtel came in October, when the nation’s top court in a shock ruling ordered it to pay $3 billion in back fees.

The technology ambitions of Ambani, Asia’s richest man, have turned the spotlight on his telecommunications rivals, including Vodafone Idea Ltd., the struggling Indian business of British operator Vodafone Group Plc. The Financial Times reported May 28 that Alphabet Inc.’s Google is considering acquiring a stake in that venture. Vodafone Idea said it isn’t currently considering any such proposal.

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