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BENGALURU: Google will invest up to $1 billion in India’s Bharti Airtel as the US technology giant expands its hold in India.
The investment is part of Google’s plans announced under two years ago to infuse $10 billion in India via its digitisation fund over five to seven years through equity deals and tie-ups.
Google’s investment includes a $700 million equity investment in Airtel. Shares will be issued to Google on a preferential basis at Rs 734 apiece and will give Google a 1.28 percent stake in the company.
Additionally, Google will set aside $300 million for potential investment and implement commercial agreements in areas like smartphone access, networks, and cloud network. The investment will help Airtel to offer a wide range of affordable devices to consumers.
The investment will help Airtel develop its devices, home broadband, data centres, cloud adoption and, over a period of time, develop 5G networks, Bharti Airtel’s CEO, India & South Asia, Gopal Vittal told analysts. “What this will do is actually fire up our digital agenda dramatically and that’s where we will double down and really go deep,” Vittal said, without elaborating on specific plans.
Gopal Vittal said the company had no plans to develop its own exclusive smartphone. It will work with partners, including lenders, device manufacturers, and e-commerce companies, to improve the availability of smartphones, he added.
The company is also using software tools and data models that predict customer purchase trends and allows for targeted offers. Airtel has more than 190 million 4G customers, adding nearly 80 million users in the past two years.
In the last few years, India’s telecom market has been hit hard by a price war after Jio, controlled by India’s richest man Mukesh Ambani, entered the market in late 2016 with free voice calls and cut data prices. Airtel, India’s second-biggest carrier, has said it will gradually raise prices and, last year, raised up to 210 billion rupees to cut debt and fuel growth.
Conglomerate Reliance Industries’ digital unit Jio Platforms, which houses Airtel’s rival Jio, received a $4.5 billion investment from Google in July 2020. Months later, the companies launched a low-cost 4G smartphone with a tweaked Android operating system aimed at first-time smartphone buyers.