Amazon has made a very big impact in India's market for a while now and now are eyeing for entering into the telecom industry. A source named Reuters has reported that Amazon is trying to buy 5% stake of Airtel which is one of the leading telecom industry in the Indian market. Airtel being third largest telecom industry can create a greater impact with the help of US based Tech Company.
These American giants have started to invest in Indian based firms lately for the last 10 years and are trying to make these Indian telecom services to a multi national level. These investments will help Indian based telecom industries to expand their business to different countries and help in creating an International impact.
Also Read: Amazon Experimenting In Food Delivery Services In India
Deal At an Early Stage
Although this deal being in the early stages, its a very small step to the globalization of India's telecom industry but it will surely help in booming of India's economy. With more and more country looking for investing in India with the latest pandemic being one of the cause, this can be termed as a start of something good in the economic front which is needed at this time of crisis.
A Wave Of Competition In The Telecom Industry
Interesting part of this deal is that it has come at the time when most of the Indian telecom are being invested by these big giants. Reliance Jio has sold its stake of around $10 bn from a very big lists of investors in the past few months.Investors like Facebook,General Atlantic($869 Mn), Vista Equity Partners($1.5 Bn), Silver Lake($746 Mn) and KKR($1.5 Bn) has been a major investors in India's top telecom industry Reliance Jio. Investment by Facebook in Reliance Jio has played a very important role and created a more competitive market in the telecom field.
Jio has always done something out of the box as it has grown up so quickly and have created a very big impact on the Indian telecom industry. Big giants like Vodafone started to go into debt as it created a havoc in the market. Since ,the announcement of partnership with some of the big US based tech giants it has once again made the competitors guessing and have forced them to take these kind of steps.
Even, Mubadla Investment an Abu Dhabi based investor has stated to invest around 1.85 percent of share in Reliance Jio recently. Mukesh Ambani confirmed the news of this investment and creating a bigger impact on the market.
Also Read: Reliance Industries made Acquisitions worth $3 billion in past 3 years
Google trying to help Vodafone from a debt, as talks are there too of Google buying up 5% stake of Vodafone. This could help Vodafone to become a valuable contender again in the telecom market. Vodafone once being one of the top telecom service provider has not been great financially for few years. It has become very important for them to once again come back in the competition.
After these speculations, share prices of Bharti Airtel has saw an increase of 5.73% per share. Which has shown a positive outcome on its economic front. It has made many of it's investors happy after a long time as they have seen a silver lining of hope after so long.
Deal being at a very early stage, and changes can be made at any moment as it has come from sources which haven't confirmed the news.
Statement given by the Amazon spokeswoman said the company does "not offers comments on speculation of what may or may not to do in future".
Whereas Bharti Airtel said that they will love to collaborate with the digital players around them and would love to accept their products, their content and their services provided to the customers. Bharti Airtel stated that "Beyond that there is no other activity to report". Giving up a little bit of hint that this type of deal can be a possibility in near future.
Amazon And Indian Market
Amazon counts Indian market as one of its important growth market and have a total investment of around $6.5 bn in the e commerce front. The US based company founded by Jeff Bezos in the recent years have developed a multi venture market in India by bringing voice controlled speakers called Alexa, video streaming site namely Amazon Prime Video and even a cloud storage.
Amazon are trying to capture different market opportunities around India therefore teaming up with the telecom Industries is also a major step. Amazon becoming the household name has been a hit in India
When Amazon was launched in February 2012 with its eCommerce site it became an instant hit within the people as people started to prefer online marketing instead of going out and shopping. It attracted a large range of customers back then and became a major part of India's revolutionized industry. They have garnered a lot of trust of customers in India and have acquired a good hold in our country
In 2016, Amazon dived into India's streaming industry and created an unremarkable place in this industry. Amazon Prime Video has been one of the best streaming platform in our country and is a hard competitor for Netflix and Hotstar. It has provided India with some of the beautiful content which are mostly Indian based content due to which it has increased it's user base in India. Even music streaming platform provided with the membership of Amazon Prime have been a great help. Providing membership to the customers benefiting them with more features at a very lower cost has also helped them to create a strong hold in India.
With the thought of getting a hold in the telecom Industries they can bring up new features which can be more user friendly at a lower cost and people can enjoy many of their services. It would be interesting to see what changes can be made by them by involving themselves in the telecom industry.
Link : https://startuptalky.com/amazon-airtel-deal/
Author :- Yash Raj Srivastava
June 05, 2020 at 10:51AM
StartupTalky - Your Entrepreneurial Journey Starts Here!