Internet giant Google is believed to be exploring the purchase of a 5% stake in Vodafone Idea, India's beleaguered service provider, according to media reports. (See Vodafone Idea continues its Indian journey, for now.)

Vodafone Idea has been under huge pressure in the Indian market, and any investment could provide a new lease of life for the company. It was badly hit by the Supreme Court judgment last year regarding licensing payments to the government. Vodafone and Idea, the parent companies of the joint venture, have both said they may be unable to continue without government aid.

About a month ago, social media giant Facebook spent $5.7 billion on a 10% stake in Jio Platforms, the parent company of Reliance Jio, Vodafone Idea's biggest rival. Several private equity funds, including Vista, Silver Lake, General Atlantic and KKR, have also invested in Jio Platforms in the last month, taking the total investment in the operator to more than $10 billion. Recent media reports suggest Microsoft and Mubadala Investment Company, Abu Dhabi's sovereign wealth fund, may also soon invest in Jio Platforms. Google, meanwhile, is still believed to be in talks with Jio as well, while Airtel, the other big Indian operator, has just raised $1 billion by selling a 2.75% stake. (See Say hello to India's first digital service provider.)

If a deal with Vodafone Idea does go through, it would pit two Internet giants, Facebook and Google, against each other and raise the prospect of new product offerings from the Indian service providers.

It would also help Google to promote its products to more than 300 million subscribers of Vodafone Idea. While a 5% stake will not give Google any significant say in the company operations, Vodafone Idea should benefit to some extent from Google's vast technology prowess as it tries to evolve into a digital service provider.

A deal should also buoy Vodafone Idea's confidence about taking on Jio, which right now seems insurmountable. The Indian telecom industry has witnessed a major funds infusion over the last seven-to-eight months and this investment, if it happens, will add to that. (See Record funds for Indian telcos could signal revival.)

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Google might be able to strike a favorable deal with Vodafone Idea, whose situation has recently looked desperate. It needs an injection of funds merely to survive in the face of intense competition from rivals Jio and Bharti Airtel.

The Internet giant may also benefit from access to Vodafone Idea's high-paying subscribers. Vodafone Idea and Bharti Airtel, the incumbent operators, are known to have a bigger share of customers in this market segment than Jio. This is mainly because the early adopters of new technology continued to remain loyal to their original service provider, while Jio was able to attract lower-spending subscribers with free data and devices.

Recent interest from Facebook and Google in Indian telcos could spur other tech giants, such as Amazon and Microsoft, to consider investing in Airtel or other service providers.

— Gagandeep Kaur, contributing editor, special to Light Reading