As was widely speculated, Google will invest up to $1 billion in Bharti Airtel as part of its 'Google for India Digitization Fund.' Bharti Airtel said the deal would include Google investing $700 million to acquire 1.28% ownership in the telecom major and up to $300 million towards potential 'multi-year commercial agreements'.
Bharti Airtel's directors today approved the issuance of up to 7.1 crore equity shares of face value of Rs 5 each of the company to Google International on a preferential basis at a price of Rs 734/- per equity share.
Sundar Pichai, CEO of Google and Alphabet said: “Our commercial and equity investment in Airtel is a continuation of our Google for India Digitization Fund's efforts to increase access to smartphones, enhance connectivity to support new business models, and help companies on their digital transformation journey.”
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As a part of its first commercial agreement, Airtel and Google will work together to build on Airtel’s offerings on Android-enabled devices. It may be recalled that like Jio, Airtel also has plans to launch affordable Android phones in India.
Airtel said "the companies will continue to explore further opportunities to bring down the barriers of owning a smartphone across a range of price points, in partnership with various device manufacturers."
This suggests that Airtel may also get in a tariff battle with Jio, which as is well known, has disrupted the telecom market in India with its its cut-throat tariff plans.
Airtel added: "The partnership will focus on enabling affordable access to smartphones across price ranges, and will continue to explore building on their existing partnerships to potentially co-create India-specific network domain use cases for 5G and other standards. It will also help accelerate the cloud ecosystem for businesses across India."
Sunil Bharti Mittal, Chairman of Bharti Airtel said, “With our future ready network, digital platforms, last mile distribution and payments ecosystem, we look forward to working closely with Google to increase the depth and breadth of India’s digital ecosystem.”
What makes Google's investment interesting and intriguing is the fact that the tech major has also pumped in funds into Airtel's rival Jio Platforms. Google has put in $4.5 billion in Jio Platforms as part of its $10 billion India Digitization Fund that it had announced in July 2020.
More cooperation in 5G
As 5G spectrum auction and subsequent rollout is to happen India, the two companies will have a few plans here, too.
And Airtel pointedly said: "Under the larger strategic goals, both companies will also potentially co-create India-specific network domain use cases for 5G and other standards. Airtel is already using Google’s 5G-ready Evolved Packet Core & Software Defined Network platforms, and plans to explore scaling up the deployment of Google’s network virtualisation solutions."
Both companies will also focus on growing the cloud ecosystem in India to accelerate their digital transformation journeys. Airtel, as of now, serves over one million small and medium businesses with its enterprise connectivity offering, and this partnership will help accelerate digital adoption.
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