The amount will include equity investment as well as a corpus for potential commercial agreements
Bharti Airtel and Google on Friday, January 28, 2022, said that they will partner on a long-term, multi-year agreement to accelerate the growth of India’s digital ecosystem, under which Google intends to invest up to USD 1 billion.
The amount is part of the USD 10 billion ‘Google for India Digitization Fund’, which was announced by CEO of Google and Alphabet Sundar Pichai in 2020, and will include equity investment as well as a corpus for potential commercial agreements, to be identified and agreed on mutually agreeable terms over the course of the next five years, the companies said in a statement.
“Together, they will work to bring best-in-class end-to-end products to serve customer needs, provide quality customer experience, and bring their expertise to solve problems of affordability, access, and digital inclusion,” they added.
The deal includes investment of USD 700 million to acquire 1.28% ownership in Airtel and up to USD 300M toward potential multi-year commercial agreements. 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
The deal is subject to necessary regulatory approvals.
India-specific network domain
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 covers 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 virtualisation solutions to deliver a superior network experience to their customers,” it added.
Both companies will also focus on shaping and growing the cloud ecosystem in India to accelerate their digital transformation journeys.
Sunil Bharti Mittal, Chairman of Bharti Airtel said, “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.”
Mr. Pichai added “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.”
Bharti Airtel shares were trading higher by 1.85% at ₹ 720.30 per share on the BSE at 10.08 am.
Google had in 2020 also announced investments of USD 4.5 billion for a 7.73% stake in Mukesh Ambani led Jio Platforms.