Mumbai: After investing $4.5 billion in Reliance owned Jio Platforms in 2020, Google to invest $1 billion in Airtel over course of the next 5 years.
Google to invest $1 billion in Airtel
Google’s $1 billion investment in Airtel is part of Google for India Digitized Fund (IDF) announced in 2020. IDF had made its first investment of $4.5 billion ( Rs 33.737 crore) in Reliance Jio Platforms two years ago.
Google will invest ₹33,737 crore in Jio Platforms, buying a 7.73% stake in the Reliance Industries owned digital venture. This is a part of Google’s $10 billion investment in India announced on Monday and it is the Google for India Fund’s first investment.
“We are excited to share that we are making an investment in Bharti Airtel as part of the Google for India Digitization Fund, which will include a $700 million equity investment and a corpus of up to $300 million that will go towards implementing mutually agreed commercial initiatives over the course of the next five years,” Google said in a blog post on Friday.
“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,” said Sundar Pichai, CEO of Google and Alphabet.
With the $700 equity investment, Google will have a 1.28% ownership in Bharti Airtel at a share price of INR 734.
The investment is part of a long-term, multi-year agreement between Google and Bharti Airtel. Under the mutually agreed commercial pact, Airtel and Google will work together to build on Airtel’s extensive offerings, which includes a range of Android-enabled devices to consumers via innovative affordability programs.
Both companies have a plan to offer a smartphone across a range of price points, in partnership with various device manufacturers.
Interestingly, Google and Reliance Jio also have signed a similar agreement to jointly develop an entry-level affordable smartphone with optimizations to the Android operating system and the Play Store.
On the telecommunication technology front, Google and Airtel are likely to 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 and Software Defined Network platforms.
Airtel plans to explore scaling up the deployment of Google’s network virtualisation solutions to deliver a superior network experience to their customers.
Besides, both companies will also focus on the cloud ecosystem in India to drive digital adoption among SMBs and enterprises. Already, Airtel has more than 1million small and medium business (SMB) customers using its enterprise connectivity offering.
“Airtel and Google share 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,” said Sunil Bharti Mittal, Chairman – Bharti Airtel.
However, the question remains why has Google chosen to invest in two companies ( Airtel and Jio) that are close competitors?