Published: 05-Jun-2020
Why are companies like Facebook/Amazon/Google/Microsoft buying stakes in Indian telecom players? Just a few initial thoughts.
It is essentially a distribution ploy. But all these giants are demand aggregators who already own customers (Microsoft is the only exception as it is a platform, not an aggregator). So why are buying access to customers?
They do not want access to you and me (they already have that) but to get access to the new internet customer. And no prizes for guessing which country is expected to add the highest number of NEW internet users in the next few years.
These ‘strategic investments’ into telecom players (different from M&A) are to set the ground for future ‘strategic partnerships’. Telecom players are the best point of contact for the new internet consumer. So, Facebook/Amazon/Google/Microsoft can piggyback on this first point of contact to sell their offerings (either integrate or bundle). These offerings can be for both consumers & small business (“MSMEs”).
For consumers – it could be a fight for the financial services pie (mostly payments), media/content pie & e-commerce pie.For MSMEs – it could be a fight for the financial services pie (payments, capital aka credit) & digitization stack (cloud, suite, etc).
And now, each telecom player (through the US tech cos) has offerings for both segments.
Vodafone-Idea (now Vi) + Google
1. Gpay for consumers (& MSMEs)
2. Gsuite & Google cloud for MSMEs
Airtel + Amazon
1. Amazon Pay, Amazon Shopping, Prime Video for consumers
2. AWS, Amazon Store for Merchants for MSMEs
Jio + Facebook & Microsoft
1. Facebook, Whatsapp, Whatsapp Pay for consumers
2. Microsoft Azure cloud & Office suite for MSMEs
Microsoft in fact already had this partnership with Jio. But with the investment, it can cement this relationship
