India is the location of the latest battle between the cloud giants. Last week, we reported that Microsoft is mulling a $2bn investment in Reliance Jio, while Google is eyeing a 5% stake in market leader Vodafone Idea. That came a few weeks after Facebook had announced its INR 435.7bn ($5.7bn) investment in a 9.9% stake in Jio Platforms, the subsidiary of Reliance Industries (RIL) in which RJio sits.
Now, in case the third of the Indian MNOs, Bharti Airtel, was feeling left out of the attention being shown to its two rivals, it is reportedly in talks with Amazon AWS. The webscaler is interested in paying about $2bn to get about 5% of Bharti, Reuters sources said.
As with the other potential deals, a Bharti Airtel stake would bring several benefits for Amazon. Most immediately, the US company could tap into Bharti’s customer base of 280m subscribers and large numbers of small and medium enterprises, to push its content and cloud services and increase its share of the e-commerce market, in a country which has a large number of local, smaller-scale online retailers.
But that could be achieved by expanding the relationship Amazon already has with Bharti, which offers Amazon Prime free to higher end subscribers, for instance. In addition, it is likely that the cloud giant wants, like Facebook, Microsoft and Google, to provide funding for the indebted telcos, in return for significant influence over their future network plans.
This could be a way to drive adoption of open network platforms and distributed edge/5G architectures, of the kind the webscalers support heavily as they seek to reshape the telecoms platform, in a way that better suits their own economics and business models. (See Wireless Watch May 29 and April 24 editions for full analysis of these dynamics).