China Mobile is mulling a foray in India by entering cloud services through a tie-up with either Vodafone Idea or Bharti Airtel, according to a Mint report. The newspaper said the Chinese state-run telecom major could acquire a significant stake in a joint venture with the Indian telecom firms through a holding company structure. It added that China Mobile held a meeting with both Indian telecom firms in December 2019 to discuss the possibility.
A holding company structure would give China Mobile board seats and voting rights in the Indian telecom companies even as it would not need to get involved in the day-to-day operations. Money control could not independently verify the report. China Mobile and Bharti Airtel did not respond to Mint’s queries, while Vodafone Idea called it speculation.
An investment in the cloud infrastructure network by China Mobile would not only help Vodafone Idea or Bharti Airtel raise capital to deleverage – both companies have debt of over Rs 1 lakh crore – but also help them scale up for 5G rollout. Both companies have been struggling since the rollout of Reliance Jio in September 2016, which has adopted an aggressive pricing model and rapidly grabbed market share.
China Mobile is China’s dominant telecom player in a market that has now saturated. Reports say the company is scouting for international opportunities, having created a holding company structure for this purpose.
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