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Is this the best time for Amazon, Verizon to invest in Voda Idea?

Does it make business sense for Amazon Web Services (part of Amazon) and Verizon to buy a stake in cash-strapped Vodafone Idea?

As the Vodafone Idea board met to discuss fund raising, there is speculation it has renewed talks with Amazon.

Talks were suspended earlier, in anticipation of the Supreme Court verdict in the AGR (aggregate gross revenue) case.

Whether the two global giants will bite the bullet is anyone’s guess.

In order to determine whether this would be sound strategy for them, one needs to look at two issues: One, on the alliances being built globally between telcos, on one hand, and cloud service firms, on the other, especially with the advent of 5G; and two, how their business strategies in India will blend into with such a deal.

At global level, Amazon, with its expertise in cloud, and Verizon, with its telecom network and customers, are waging a battle with the combined power of Microsoft and AT&T to provide cloud and edge computing solutions to enterprise customers, especially with the advent of 5G in the US.

The aim is to provide them low latency, highly secure and high-speed services as numerous devices and machines get connected on the 5G network.

And that is understandable as a substantial portion of the 5G revenue for telcos will come from non-mobile services.

And for cloud companies, it is an opportunity to leverage this exponential increase in business and solutions.

It will be no different in India, especially with telcos looking at alliances to offer cloud and data centres to increase their revenues from the enterprise business segment, which also provides healthy margins.

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