Amazon in talks to buy $2 billion stake in Bharti Airtel

NEW DELHI/HONG KONG:Amazon.com is in early-stage talks to buy a stake worth at least $2 billion in Indian mobile operator Bharti Airtel, three people with knowledge of the discussions told Reuters, in a move that could turbocharge India?s digital economy.nnThe planned investment, if completed, would mean Amazon acquiring a roughly 5% stake based on the current market value of Bharti and would give India?s third-largest telecoms company a boost as it seeks to compete against the number one player Reliance Jio.nn?Jio has transformed itself from a pure mobile operator to a digital technology-led consumer facing platform, and Airtel can do the same,? said one of the people.nn?Airtel is looking to play a catch-up game here, and for Amazon it makes all the strategic directional sense for the India business.?nnAmazon had been mulling several investment options, including buying a stake worth up to 8-10%, a second person said.nnThe talks between Bharti and Amazon are at an early stage and the deal terms could change, or an agreement may not be reached, said two of the three people, all of whom declined to be identified because the discussions are confidential.nnIf talks to buy a stake fail, the companies could also look at a commercial transaction that could give Bharti?s customers cheap access to Amazon products, one of the people said.nnAn Amazon spokeswoman said the company does ?not offer comments on speculation of what we may or may not do in future.?nnBharti said they routinely work with all digital players to bring their products, content and services to customers. ?Beyond that there is no other activity to report,? it said in a statement.nnShares in Bharti closed 3.8% higher after rising as much as 6% on news of the Amazon talks. The broader NSE Nifty 50 index .NSEI closed down 0.32%.nnU.S. TECH INTERESTnThe discussions between Amazon and Bharti underscore the attraction of India?s digital economy for U.S. tech giants.nnOver the past six weeks, Jio, the digital arm of Reliance Industries (RELI.NS) raised $10 billion from global investors including Facebook (FB.O) as it seeks to establish itself as a one-stop digital commerce platform.nnAlphabet Inc?s (GOOGL.O) Google is also exploring an investment in Vodafone Idea, a joint venture between Britain?s Vodafone Group Plc (VOD.L) and India?s Idea Cellular, the Financial Times reported last week.nnVodafone Idea is the second-largest telecoms company in India, where the coronavirus lockdown has led to a surge in demand for online shopping, entertainment and data.nnAmazon counts India as a crucial growth market where it has committed $6.5 billion in investments mainly toward expanding its e-commerce footprint.nnThe Seattle-based company has also expanded its digital offerings in India via its voice-activated speakers, video streaming and cloud storage, as it seeks to tap a rising number of internet and smartphone users in the country of 1.3 billion people.nnA deal with Bharti could help Amazon expand offerings via its smart speakers and also boost its cloud business as access to Bharti?s vast telecom fibre network could help Amazon lower costs. Reliance?s Jio has already partnered with Microsoft for use of its Azure cloud platform.nnSource: Reuters, Reporting by Aditya Kalra in New Delhi and Sumeet Chatterjee in Hong Kong; Additional reporting by Sankalp Phartiyal Editing by Carmel Crimminsnn