INDIA: American tech giant Google has recently finalized a $1 billion investment deal in India’s leading telecom company Bharti Airtel. This partnership will help Airtel to support affordable smartphones in the market, develop a 5G network & cloud growth across the country.
The deal with Airtel will be funded out of Google’s $10 billion India Digitization Fund. The company will invest $700 million for a 1.28% stake in Airtel at a price of Rs.734 per share. The remaining $300 million be spent on matters such as supporting reasonable smartphones, development of 5G network & cloud growth across the country.
This Airtel financing comes at an estimation of $54.7 billion (Rs 4.1 lakh crore). The deal is not limited as both companies are open to having other partnerships. Also, Airtel will continue to offer cloud services to other operators such as AWS & Oracle. With new growth areas, this partnership is expected to obtain a prominent assessment for Airtel. Besides, the tech giant will not get a board seat on Airtel.
Sunil Bharti Mittal, chairperson of Bharti Airtel stated, “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 & breadth of India’s digital ecosystem.”
Talking about this, the CEO of Google & Alphabet, Sundar Pichai 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.”
Commenting on the impacts of this partnership in India, Prashant Singhal, the telecom reader at Ernst & Young India said, “There will be multiplier effects. We feel that Google’s keen focus on India is a great confidence booster for the local industry, and also for Airtel. The partnership will help in getting 5G use cases faster in the market, apart from the development of affordable devices & cloud infrastructure.”
The Google – Jio Deal
Before the Airtel deal, in July 2020, Google had invested $4.5 billion for a 7.73% stake in Mukesh Ambani’s Jio. Google’s investments in Jio had come at a valuation of $58.1 billion (Rs 4.36 lakh crore) for the Ambani. Unlike Airtel, Google got a board seat on Jio. Google & Jio co-developed JioPhone Next together.
Also Read: Google to Open a New Cloud Office in Pune This Year
