Amazon.com Inc. is reportedly holding early-stage talks with Bharti Airtel, India’s third-largest telecommunications provider, about buying a stake in the firm worth $2 billion or more.

The details were published today by Reuters, which attributed the information to three people with knowledge of the discussions. A $2 billion deal value would give Amazon a roughly 5% stake in Bharti Airtel at its current market capitalization. The sources said that it’s also possible the online retail giant will opt to buy a bigger stake of 8% to 10%. 

With its population of more than 1.3 billion, India has emerged as a key market for U.S. tech firms. The report of Amazon’s talks with Bharti Airtel follows rumors that Google LLC and Microsoft Corp., Amazon’s two biggest rivals in the cloud market, are also in talks with Indian carriers about buying multibillion-dollar stakes. 

Google is said to be eyeing a 5% stake in No. 2 Indian carrier Vodafone Idea Ltd. while Microsoft is reportedly planning a $2 billion investment into market leader Reliance Jio Infocomm Ltd. Jio has already raised $10 billion from investors over the past few weeks, including $2 billion from Facebook Inc. in April. That deal bought Facebook a 9.99% stake in the carrier.

For Bharti Airtel, a multibillion-dollar investment from Amazon could be a way to create a more even playing field with its bigger rivals. Amazon, in turn, would gain a valuable partner to help grow its operations in India.

The online retail giant has committed more than $5.5 billion to expanding its e-commerce business in India and last year chose Hyderabad to host its largest corporate campus outside Seattle. Meanwhile, Amazon Web Services is also building out its local presence. A February report claimed that Amazon’s cloud subsidiary has earmarked $1.6 billion for two additional data centers near Hyderabad as part its efforts to win more local business customers.

A potential Amazon investment in Bharti Airtel may benefit AWS by creating opportunities for go-to-market collaboration with the carrier. Moreover, any future alliance between the companies could theoretically include more technical elements as well. Rival Microsoft, for example, last year inked a partnership with Jio under which Azure services will be delivered from Jio data centers.

Reuters reported that Amazon and Bharti Airtel may look at partnership opportunities even if the investment negotiations fall through. According to one of the sources cited by the news agency, such a partnership may see the carrier offer certain Amazon products at a discount to its customers.

Amazon is working in parallel to grow its presence in the telecommunications market outside India. The company has partnered with Verizon Communications Inc., Vodafone Group Plc and other global carriers on a solution called Wavelength that delivers AWS services from network operators’ data centers. Amazon is also reportedly planning to deploy thousands of internet satellites in orbit as part of a project that could enable the company to start offering broadband services directly. 

Photo: Amazon