The Battle for the Indian Telecom Industry: Amazon to Invest In Airtel after Facebook Invested in Jio

Bharti Airtel Limited, commonly known as just Airtel, has 328.19 million subscribers in India. It has a total market share of 28.38% in India, making it one of the biggest telecom services providers in the nation. Amazon is supposedly buying a 5% stake worth at least $2 billion in Bharti Airtel following in the footsteps of Facebook, which acquired a 9.9% stake in Reliance’s Jio. As this news flashed online, Bharti Airtel confronted and said, “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.” There are also reports that Google is interested in Vodafone-Idea, which has become the second-largest telecom services in India after its merger. According to reports, Microsoft is also showing interest in investing their money in Reliance Jio. India has become an important new battleground for big tech companies to show their power. 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.” Amazon’s interest in Airtel is also because of it being the best performer in India’s stocks benchmark in 2020. Since Amazon showed its importance, the stocks surged again. All this also comes after Airtel was looking for a comeback after reliance Jio overtook them having the largest market share in India, which has the second-biggest wireless market in the number of users. Airtel also recorded a loss last year because of losing its market share, and also the court ordered them to pay $3 billion in back fees. Vodafone-Idea is also in a tough situation having previous debts.

The war between Jio and former no.1 brand Airtel started in 2016 lead to many players either merging with more prominent companies or were shut because of being unable to compete with them leaving only a few telecom service provider which was not so a few years ago. Though having a lesser market share, Airtel still makes more revenue than its counterparts.

There is more at stake than just gaining several subscribers as Mr. Ambani has made Jio into a brand with opportunities to enter into the e-commerce, payments, and online entertainment platform with other subsidiary apps. Airtel has shown that it can fight, and hence Amazon has demonstrated its interest, which will also gain access to Airtel 300 million subscriber base. Through acquisitions of minority stakes in the telecom industry in India could help both tech firms and telecom operators shore up fortunes for both. Morgan Stanley reported this week, India’s e-commerce population could grow sharply post covid-19. These developments are notably crucial for some of the global tech companies; hence they are investing in India.

 

 

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