Amazon is in talks to invest $2 billion in the Indian mobile operator Bharti Airtel, according to unnamed sources of Reuters. If completed, the investment could give Amazon about a 5% stake in Bharti.
There are three major Indian telcos – Bharti Airtel, Vodafone Idea and Jio – and they are hot commodities right now, especially for American technology companies. Amazon, apparently, doesn’t want to be left out of the game.
Last week reports surfaced that Google is eyeing an investment of about 5% in Vodafone Idea. And Microsoft is rumored to be considering a $2 billion (2.5%) stake in Jio Platforms, the umbrella organization over the mobile operator Jio.
All of these investment discussions are in the early stages, and the deal terms could change or not happen at all. But if the deals do go through, “then this will have been a game-changing 6 weeks for Indian mobile,” said New Street Research analysts led by Chris Hoare in a note today.
Bharti Airtel and Amazon have worked together on the consumer side in the past, with Bharti providing Amazon Prime for free for higher-end subscribers, say the analysts, who speculate that Amazon’s intention might be to tap Bharti’s 280 million customers to expand Amazon’s share of the e-commerce market in India.
“It is difficult to overestimate how important the last few weeks has been for the Indian telco industry,” writes New Street.
In addition to the rumors of investments in Indian telcos, Jio has secured about $10 billion in funding recently, including an investment by Facebook.
Bharti Airtel recently reported its Q4 fiscal 2020 earnings. The company’s mobile revenues grew 16% from the previous quarter and were their highest in 12 quarters. Gross subscriber additions increased 22.5 million, “implying acceptance of tariff hikes, though net subscriber additions were lower at 0.7 million due to marginally higher churn,” wrote analysts at Jefferies.
The Jefferies analysts have done a comparative analysis of over 25 markets and found that mobile revenues in India could double from 2020 to 2025 to $38 billion.