Amazon reportedly in talks to buy $2b stake in Indian telco Bharti Airtel

Amazon is in talks to buy a stake in Indian telecom company Bharti Airtel worth at least US$2 billion, Reuters reported, citing three people familiar with the development.

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Discussions between the two companies are currently in the early stages, two of the sources said, which means an agreement may not be reached. If the deal materializes, the ecommerce titan would be acquiring roughly a 5% stake in Bharti Airtel based on its current market value.

India is one of Amazon’s most important growth market. It has committed US$6.5 billion to expand its footprint in the country. During his visit to India earlier this year, Amazon founder and CEO Jeff Bezos announced the company’s plan to invest over US$1 billion to help digitize local small- and medium-sized businesses.

India is also one of the fastest-growing ecommerce markets globally. According to recent projections by PricewaterhouseCoopers and Indian software industry body Nasscom, ecommerce transactions are expected to hit US$150 billion in the next two years, up from US$84 billion in 2020.

Another company that looks to capitalize on this growth is Reliance Industries Limited (RIL). Through its ecommerce venture JioMart, the local conglomerate plans to digitize kiranas, or small neighborhood stores, by making their products accessible online.

JioMart operates under Jio Platforms, RIL’s umbrella platform for its digital initiatives. Aside from JioMart, it also runs music-streaming service JioSaavn, online payments platform JioMoney, and the largest telco in India, Reliance Jio.

Over the last couple of months, Jio has been racking up billions of dollars in investments from global institutions. Its biggest one so far is Facebook’s US$5.7 billion commitment in exchange for nearly 10% of the company.

See: Why is Facebook betting $5.7b on Reliance?

Prior to the deal’s announcement, it was being reported that Jio and the social media leader were in talks to build their own super app, combining features such as social, digital payments, and gaming.

RIL chairman and managing director Mukesh Ambani later revealed Jio’s collaboration with Facebook-owned WhatsApp to help kiranas accept digital payments.

JioMart has since piloted a service that lets consumers place orders from local grocers straight from the messaging app.