Signal of change

Big Tech’s interest in Indian telecom companies could be a game-changer for the sector

- NACHIKET KELKAR

ON JUNE 7, Reliance Industries raised ₹5,683.5 crore from the Abu Dhabi Investment Authority, by selling 1.16 per cent stake in its subsidiary Jio Platforms. This was the eighth deal that Reliance had struck in a few weeks with marquee investors that included private equity firms like Silver Lake, Vista Equity Partners and General Atlantic. One name, however, stood out among the investors—Facebook. The social networking giant picked up a 9.99 per cent stake in Jio Platforms for ₹43,574 crore on April 22.

Facebook is not the only technology giant eyeing a piece of India’s telecom pie. Google is said to be looking for a 5 per cent stake in Vodafone Idea, and Amazon might make a $2 billion investment in Bharti Airtel. Though Airtel and Vodafone Idea denied the reports, industry watchers feel India is set to be Big Tech’s next big battleground. The reasons are obvious—despite being the second largest telecom market, India is still under-penetrated when it comes to smartphones and internet. The change has already begun; investment bank Morgan Stanley pointed out that data usage in the country in the past few years had seen a ‘hockey stick’ growth.

The Covid-19 pandemic, which forced the country into a lockdown, might have been a tipping point for the industry. Morgan Stanley estimates that India’s internet users could jump to 914 million by 2027 from 670 million last year. Total online shoppers are expected see a three-fold growth, to 590 million from 190 million, while average spend per online shopper will surge to $318 from $171. That will generate a glut of data.