Google to invest up to $ 1 billion in Airtel, including $ 700 million for 1.28% ownership in telecom major
New Delhi, January 28, 2022
Tech giant Google will invest up to $ 1 billion in telecom services provider Airtel in a deal that includes investment of $ 700 million to acquire 1.28% ownership in the Indian company and up to $ 300 million toward potential multi-year commercial agreements.
The two companies announced that they would partner on a long-term, multi-year agreement to accelerate the growth of India's digital ecosystem.
"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," a press release from Airtel said here today.
The investment by the internet search major is part of its Google for India Digitization Fund, which includes 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.
"This will comprise a $700 million equity investment in Bharti Airtel at a price per share of INR 734 and up to $300M that will go towards implementing commercial agreements, which will include investments in scaling Airtel’s offerings that covers a range of devices to consumers via innovative affordability programs as well as other offerings aimed at accelerating access and digital inclusion across India’s digital ecosystem," the release said.
This deal will be subject to necessary regulatory approvals, it said.
"The two organizations recognize the importance of a connected India, in empowering businesses as they progress on their Digital Transformation journeys, and building a strong digital ecosystem for consumers everywhere. Both organizations are committed to working towards building an open technology ecosystem that serves customers and businesses with innovative digital services, and have agreed to jointly explore and invest across a wide spectrum of areas to create digital solutions that uniquely serve India’s requirements," the release said.
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 programmes. 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.
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.
"Both companies will also focus on shaping and growing the cloud ecosystem in India to accelerate their digital transformation journeys. Airtel serves over one million small and medium businesses with its enterprise connectivity offering, and this partnership will help accelerate digital adoption," the release said.
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.”
“Airtel is a leading pioneer shaping India’s digital future, and we are proud to partner on a shared vision for expanding connectivity and ensuring equitable access to the Internet for more Indians,” said Sundar Pichai, CEO of Google and its parent Alphabet.
“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," he added.
Headquartered in India, Airtel is a global communications solutions provider with over 480 million customers in 17 countries across South Asia and Africa. The company ranks amongst the top three mobile operators globally and its networks cover over two billion people.