Following the footsteps of Facebook Inc, which recently bought stakes worth 9.9% in Reliance Jio, Amazon has also shown interest in Bharti Airtel Ltd. Buying a 5% stake worth at least $2 billion. The battle between Reliance Jio and former no. 1 Airtel has been going on since 2016 when Reliance introduced Jio giving free outgoing calls and charging only for the 4g data services. It pushed many players to the brink of extinction or had to merge with other big companies. Airtel now has become the third-largest telecom service provider in India, with 328.19 million subscribers and a market share of 28.38% in India.
Amazon wants to invest in Airtel as it will benefit both the companies. Airtel will get the much-needed boost, and Amazon will get access to its 300 million subscribers, which would have taken a long time through organic means. Airtel has been earning the highest revenue in the industry, and its stakes are performing best on the market. Although Airtel recorded a loss last year and the court also ordered it to pay a fine of $3 billion in back fees. Microsoft is also reportedly trying to contact Reliance Jio to invest their money, whereas Google is interested in buying stakes at the new formed merger of Vodafone-Idea.
According to a recent Morgan Stanely report, these tech companies are involved in India because India’s e-commerce population could grow exponentially after the Covid-19 pandemic. After all, many companies provide online services. These developments are of utmost importance to these tech companies as India as one of the most extensive user bases and could reap significant profits from here.
Through acquisitions of minority stakes in India, the telecom industry could help both tech firms and telecom operators make fortunes for themselves. Amit Pau, former Vodafone Group MD, said, “Facebook’s focused attack on Amazon in Indian e-commerce through its partnership with Jio Platforms is the firing gun of an epic showdown between the world’s biggest companies that will see Indian consumers win better services through digitization and boost the economy.” Though it is very early to form an opinion on the matter, India has become a famous region for global tech companies.