Shares of Vodafone Idea surged on May 30 after The Ken reported that e-commerce giant Amazon had invested up to Rs 20,000 crore in the struggling telecom operator. After returning from the brink of bankruptcy with the government’s help, Vodafone Idea has been looking for investors to raise fresh capital to pay down debt and invest in its network.

The company allows the government to convert a significant portion of its adjusted gross income payable and interest payments into equity. However, while the industry has managed to increase tariffs over the past three years significantly, the continued loss of users has weighed on the company.

The company showed signs of recovery in March’s quarter, adding more than 1 million 4G subscribers, while its consolidated operating profit rose 22%, driven by recent tariff hikes.

According to The Ken, Amazon may be interested in investing in Vodafone Idea. It remains the only major cloud services giant without a telecom partner, and Vodafone Idea is the only telecom operator without investment from a major US tech company.

Over the past two and a half years, US tech giants Facebook, Google and Microsoft have invested in Reliance Jio Infocomm and Bharti Airtel, two of India’s largest telecom operators, to strengthen their cloud services in India.
According to an International Data Corporation report, the revenue of the Indian public cloud market is expected to grow from $4.5 billion in 2022 to nearly $11 billion in 2025.

For Vodafone Idea, Amazon’s investment will not only breathe new life into the company. Still, it will also enable it to compete with rivals Airtel and Jio as the Indian government prepares to auction off the fifth-generation telecom spectrum. Shares of Vodafone Idea rose nearly 4 per cent to Rs 9.25 on the National Stock Exchange at 11.34 am.