Jio, Airtel in race for Zee stake

Mumbai: Billionaires Mukesh Ambani and Sunil Bharti Mittal are considering competing bids for a stake in a troubled television network Zee Entertainment Enterprises Ltd, 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 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 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 per cent is pledged as collateral to lenders.

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