Online retail behemoth Amazon is reportedly eyeing a stake in Bharti Airtel, following the footsteps of Facebook, which has picked up almost 10 per cent in Jio Platforms, and Google, which is reportedly keen on a 5 per cent stake in Vodafone Idea.
A Reuters report on Thursday said the Jeff Bezos-led company will invest up to $2 billion in the country’s third largest telecom player, which translates to a 5 per cent stake based on Airtel’s closing price on the BSE on Thursday. The scrip gained Rs 21.45, or 4 per cent, to close at Rs 573.15 on the BSE.
The Reuters report added that talks between the two were at an early stage and the terms of the deal could change. It is also possible that an agreement is not reached at all.
“We routinely work with all digital and OTT (over-the-top) 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 Airtel spokesperson told The Telegraph when asked for comments on the report.
Bharti Airtel had 32 crore subscribers in January, behind Reliance Jio’s 37 crore and Vodafone Idea’s 33 crore subscribers.
Amazon’s reported interest in Bharti Airtel comes after Facebook and other overseas players picked up a stake in Jio Platforms, the Reliance Industries subsidiary which houses its digital services business. Mark Zuckerberg-founded Facebook invested $5.7 billion (Rs 43,574 crore) for a 9.9 per cent stake in Jio Platforms.
Following the transaction, there were reports of Google picking up 5 per cent in Vodafone Idea.
Market circles said the proposed transaction would be a win-win both for Amazon and Bharti Airtel. The e-commerce major, which is facing intense competition from Walmart led-Flipkart and more recently Reliance’s JioMart, could tap the subscriber base of Bharti Airtel.
A deal with Amazon will enable Bharti Airtel to bring down its debt. For the quarter ended March 31, 2020, the Sunil Mittal-led company had a net debt of Rs 1.1 lakh crore.
Bharti Airtel had reported a consolidated loss of Rs 5,237 crore in the fourth quarter of the last fiscal, mainly on account of provisions to pay statutory dues.
The Indian operations saw revenues from mobile services rising almost 22 per cent to Rs 12,952.9 crore. Moreover, the average revenue per user (ARPU) for the quarter was higher at Rs 154 compared with Rs 123 in the corresponding quarter of the previous year.
Tower merger
Telecom Infrastructure company Bharti Infratel on Thursday said its board will meet on June 11 to take a final decision on the merger with Indus Towers.
The company said there can be no certainty on whether the merger will get completed or not as each party had retained the right to terminate and withdraw the scheme at any point.
The board in a meeting on Wednesday took note of the status of the scheme between Indus Towers and Bharti Infratel.
“The board has decided to meet on June 11, 2020 to take the final decision on the matter, keeping in mind the best interests of the company and its stakeholders,” Bharti Infratel said in a regulatory filing.
Bharti Infratel noted that its board in a meeting on April 23 extended the long stop date (or deadline) for the scheme till June 24 with each party retaining the right to terminate and withdraw the scheme at any point.
