Tech giant Google finally puts its eye on India. As part of its Google for India Digitization Fund, Google is to invest 1 billion dollars in Sunil Mittal’s Airtel. The deal includes 700 million dollars for 1.28 percent of stake and 300 million dollars for the term of 5 years through commercial agreements. The investment includes a $700 million equity investment in Airtel at a price of Rs 734 ($9.77) per share.
Sunil Bharti Mittal, chairman of Bharti Airtel, said the companies have the vision to grow India’s digital dividend through innovative products.
“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,” he said.
The share issue is subject to regulatory and shareholder approval and comes months after Airtel raised up to Rs 21,000 crore through a sale of shares to existing shareholders.
The statement added that as a part of its first commercial agreement, Airtel and Google will work together to build on Airtel’s extensive offerings that cover a range of Android-enabled devices to consumers via innovative affordability programs. Together, 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, it said.
“Under the larger strategic goals of the partnership, both companies will also potentially co-create India-specific network domain use cases for 5G and other standards, with cutting-edge implementations. 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 virtualization solutions to deliver a superior network experience to their customers,” it added.
Google had previously promised 10 billion USD of investment in India via its digitization fund over five to seven years through equity deals and tie-ups.
“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, and help accelerate the cloud ecosystem for businesses across India,” Airtel mentioned.
Google had also previously invested in its arch-rival Jio a whopping 4.5 billion dollars. Now whether Airtel will be able to materialize this kind of investment into something productive and better than its rivals or not, remains to be seen.