Thread by @vivekraju93

1/ Why are tech giants (FB/Amazon/Google/MS) buying stakes in Indian telecom?

Thread...
Few initial thoughts from bouncing off ideas with @manchandarohit

2/ It's essentially a distribution ploy. But all these giants are demand aggregators (barring MS) who already own customers. So why?

3/ It's not for you and me but to get access to the new internet customer. And no prizes for guessing which country is expected to add the highest # of NEW internet users in the next few years.

4/ These 'strategic investments' into telecom players (different from M&A) are to set the ground for future 'strategic partnerships'

5/ Telecom players will the best point of contact for the new internet consumer. So, FB/Amazon/Google/MS can piggyback on this first point of contact to sell their offerings? (either integrate or bundle)

6/ These offerings can be for both consumers & MSMEs.

For consumers - could be a fight for financial services pie (mostly payments), media/content pie & e-commerce pie.

For MSMEs - fight for financial services pie (payments, capital) & digitization stack (cloud, suite, etc)

7/ And now each telecom player (through the tech cos) has offerings for both segments.

Google + Voda Idea
- Gpay for consumers (& MSMEs)
- Gsuite & Google cloud for MSMEs

Airtel + Amazon
- Amazon Pay, Amazon.in, Prime Video for consumers (& MSMEs)
- AWS for MSMEs

8/ Jio + FB & Microsoft
- FB social media, Whatsapp, WA Pay for consumers
- MS Azure cloud & suite for MSMEs

MS in fact already had this partnership with Jio. But with the investment, it can cement this relationship

9/ Why now?
All telecom players are struggling. They need the money. They won't say no. (Even Jio which was not exactly struggling needed the money to cut down its debt)

10/ Who gets affected?
Indian startups will. These tech giants will only get more powerful with these deals. If I am sold Google Cloud and its services bundled with my data connection (Cloud will be offered as 'free'), I might never even get a chance to try out Zoho

11/ Why are they not being stopped?
Ideally, these deals should at least be put under the scanned if not stopped. Don't know why the regulator (TRAI) is not stepping in? Probably good lobbying?

12/ Additional thoughts...
Jio kinda always had this idea from the beginning. Started with infra (the network) and go downstream to applications. Stronger lock-ins. Tech giants (the applications) are now going upstream into infra through these investments

Fin

13/ One thing I forgot to mention is these deals put net neutrality at stake. By tieing up closely with the 'mobile data provider', ie the telecom, I can push 'my applications' vs competitors
This is why I am surprised as to why TRAI has not stepped in yet

New Fin.