MUMBAI • 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. A spokesperson for Bharti said the company is not in the race to acquire the television network. Jio 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.
“The objectives of the telcos will not be necessarily to own Zee, but have adequate strategic stake so as to play into the distribution opportunity on their high-speed networks,” Mumbai-based Alok Shende, principal analyst at consulting firm Ascentius Insights said.
Interest in Zee “is reflective of the triple play opportunity that is unfolding in the Indian market”, he said, referring to the ability of mobile players to bundle carriage, content and commerce on a single platform.
Shares of Zee climbed 3.2% in Mumbai yesterday, leading gains in the S&P BSE 100 Index.
Reliance Industries Ltd, Jio’s parent company, declined 1.6% while Bharti rose 1.9%.
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. — Bloomberg