Billionaires Mukesh Ambani and Sunil Bharti Mittal are considering competing bids for a stake in a troubled Indian television network, people with knowledge of the matter said, as their telecom carriers race for content in the world’s second-biggest mobile market.
Mittal’s Bharti Airtel Ltd. has started due diligence of Zee Entertainment Enterprises Ltd. and is expected to make a formal proposal soon, one of the people said, asking not to be identified citing confidentiality. Ambani’s Reliance Jio Infocomm Ltd. is also considering a bid, the people said. Deliberations are preliminary and may not lead to a transaction, they said.
A representative for Zee said the company doesn’t comment on speculation though it is in “steady dialogue" with potential partners. Reliance Jio Infocomm and Bharti did not immediately respond to emails requesting comment.
A successful deal would help the winning bidder add a slew of video services in the scramble for user revenue as the government prepares to auction 5G airwaves this year. Some of the world’s largest telecommunications companies including AT&T Inc., Vodafone Group Plc and KDDI Corp. have been buying film and television production and cable TV assets to bolster earnings as subscribers level off.
Bidding for such assets has accelerated as entertainment providers themselves gather content to offer programming via the Internet and compete with upstarts like Netflix Inc. and Amazon.com Inc.’s Prime service.
Zee, the heavily-indebted broadcaster controlled by former rice trader-turned-media mogul Subhash Chandra, is seeking a strategic investor to help fend off competition from Netflix, Amazon and hundreds of local TV channels vying to tap India’s booming demand for content.
Zee, which boasts 1.3 billion viewers across 173 countries through its 78 channels and 4,800 movie titles, has previously attracted interest from Sony Corp. and Comcast Corp. but hasn’t found a buyer yet. The television network has offered to sell half of the controlling family’s shares, of which 59 percent is pledged as collateral to lenders.
Jio stormed the market in 2016 with free calls and cheap data and forced some rivals to retreat or merge. Bharti, once No. 1, has been relegated to second position after Vodafone’s local unit combined with billionaire Kumar Mangalam Birla’s Idea Cellular.
While Bharti has been adding some digital services to its portfolio, such as apps for e-books and music, its scale hasn’t matched Jio, which already offers a bouquet of services including Saavn, a music app, television, news and movies.
In February, Bharti revealed plans to raise as much as 320 billion rupees ($4.6 billion) from a rights issue and bond sales to build a war chest as competition with Jio intensifies. Last year, Bharti entered into a content deal with Zee for exclusive videos on Airtel applications.
In a January interview at the World Economic Forum in Davos to Bloomberg Quint, Mittal said Airtel will have to provide subscribers content from the likes of Zee, Netflix and Amazon to get them to use more data and boost revenue.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.