Google Airtel Partnership: Google has announced that it will invest up to $1 billion in India’s second-largest telecom operator, Bharti Airtel. Alphabet Inc., which owns Google, will pay about $700 million for a 1.28% stake in Bharti Airtel and another 300 million is expected to go for the multi-year plans that will include devices.
Bharti Airtel announced on January 28th that its board has approved the issuance of 7.1 crore equity shares to Google on a preferential basis. The partnership between the search engine giant and the telecom operator is expected to accelerate the growth of the country's digital ecosystem.
Google CEO Sundar Pichai said that the investment is a continuation of Google for India Digitization Fund’s efforts to increase access to smartphones and enhance connectivity in India to support new business models and help companies on their digital transformation journey.
Google Airtel Partnership: All you need to know!
• Under Google's partnership with Airtel, it will invest up to $1 billion in the telecom company, as part of its Google for India Digitization Fund. This includes both equity investment and corpus for potential commercial agreements that will have to be identified and agreed on mutually agreeable terms over the next five years.
• This includes an investment worth $700 million to acquire a 1.28% stake in Airtel and about $300 million towards potential multi-year commercial agreements.
• The Google-Airtel deal was approved by Bharti Airtel's board at its meeting on January 28, 2022. The board approved the issuance of 7.1 crore equity shares of the face value of Rs 5 each to Google International LLC on a preferential basis. The deal, however, will be subject to necessary regulatory approvals.
• Under their first commercial agreement, Google and Airtel will work to build on Airtel's existing offering that covers a wide range of Android-enabled devices to consumers through innovative affordability programs.
• The companies will explore further opportunities as well to make smartphones more affordable in partnership with various device manufacturers.
Significance
Bharti Airtel Chairman Sunil Bharti Mittal said that both Google and Airtel share the vision to grow India’s digital dividend through innovative products. Mittal said that Airtel with its future-ready network and digital platforms and last-mile distribution is looking forward to working closely with Google to increase the depth and breadth of India’s digital ecosystem.
Google's funding is expected to give Airtel more firepower to boost its 5G plans and take on its biggest rival, Mukesh Ambani's Reliance Jio. Bharti Airtel's shares climbed by almost 2.04% to Rs 721.65 per share on the BSE after the announcement.
Background
Google had previously also bought a $4.5 billion stake in Reliance Jio Platforms in 2020 and co-developed an affordable smartphone, in line with Prime Minister Narendra Modi’s flagship ‘Digital India’ program.
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