Amazon is reportedly in talks to buy a $2 billion stake in Indian telecommunications giant Bharti Airtel.
Amazon’s potential $2bn investment in Bharti Airtel would see it acquire an approximate 5% stake in the company, reports Reuters, citing ‘three people with knowledge of the discussions’.
Bharti Airtel owns music streaming service Wynk Music, a rival of India-based streaming services Gaana and JioSaavn and of course Spotify, which continues to challenge the market’s dominant local players.
As MBW reported last month, the parent company of another music streaming platform, JioSaavn, also recently took on investment from a US tech giant.
Jio Platforms, which owns JioSaavn and giant telco RelianceJio, recently raising over $6bn from Facebook and Silver Lake.
Bharti Airtel is India’s third largest telco with over 328 million subscribers, following behind Vodafone Idea with around 329m. RelianceJio (Jio) the country’s largest telco, has over 276m subscribers.
One of Reuters sources are cited as saying: “Jio has transformed itself from a pure mobile operator to a digital technology-led consumer facing platform, and Airtel can do the same.
Added the source: “Airtel is looking to play a catch-up game here, and for Amazon it makes all the strategic directional sense for the India business.”
Citing App Annie data, Airtel claimed in November 2019 that Wynk Music was the No.1 music streaming app in India in terms of Daily Active Users, without giving an actual number.
It also reported in November that it had crossed 100 million installs in January 2019, having only launched in India in September 2014.
In July 2019, Airtel’s rewards program #AirtelThanks started offering the telco’s Postpaid and Prepaid mobile customers free access to Wynk Music’s 40m song catalog to use any tracks they like as ringtones.
To do so, they are required to download the Wynk Music app on either iOS or Android) and need to renew the ‘Hello Tunes’ subscription through the Wynk Music app every 30 days.
Reuters’ adds, again, citing its sources, that the early-stage negotiations between Amazon and Airtel might not result in a deal at all, with the possibility of the terms changing if a deal is a is reached.
The potential acquisition of a stake worth up to 8-10% is also being considered by Amazon, said one Reuters’ sources.
An Amazon spokeswoman told Reuters that it doesn’t “offer comments on speculation of what we may or may not do in future”.
Reuters also reports that Airtel shares “closed 3.8% higher after rising as much as 6%” on news of the talks.
Meanwhile, JioSaavn claimed last month that it has grown its paying subscriber base 4x from early 2019 to now, although it hasn’t divulged its exact subscriber number.
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