Last month we saw some very interesting developments in the Indian telecom sector. Mukesh Ambani, India’s richest businessman, managed to raise over a whopping $10 billion of foreign investments from the likes of Facebook, General Atlantic, KKR, Silver Lake Partners and Vista Equity Partners for its telecom venture Jio Platforms. It is also in talks with Abu Dhabi’s Mubadala to raise around another $1.2 billion this week likely.
Besides, reports say that global e-commerce behemoth Amazon.com might invest $2 billion in telecom giant Bharti Airtel Ltd. And Internet giant Google is eyeing a stake in Vodafone Idea Ltd. While the Indian telecom players’ main agenda is to reduce their respective debts, but it seems that the American FAG (Facebook, Amazon and Google) companies have entered a three-way battle to access data of 130 crore Indians so that they can push more offerings from their respective stable.
The pandemic caused by the COVID19 virus has once again created massive opportunities for the telecom sector as data consumption has reached its peak during the lockdown as people stayed indoors and remained connected to the outer world through mobile phones and video calls. This is sector is likely to grow as work-from-home and online-schooling is going to grow during the COVID period and after.
In my opinion, all the three companies have been betting big on payments lately. Facebook has WhatsApp Pay, Google with GPay and Amazon’s Amazon Pay have been trying to get a strong foothold in the burgeoning digital payments segment in India. While GPay already has a dominant position, WhatsApp is still in beta and is waiting for a final nod from the RBI to launch is payments. Amazon is still playing a catch-up. The pandemic has also led to a surge in digital payments and all the three players have an opportunity to capitalise on this rising trend as contactless payments is going to be the new norm even post COVID.
That apart, Amazon and Google are trying to compete with each other on several fronts, from cloud offerings to voice assistant devices to IoTs to e-commerce. A telecom play would give them access to millions of customers that are still untapped.
So in my view, the FAG companies will have a stiff competition in the Indian market in payments and it will also lead to the revival of the once-lucrative telecom industry.