Google invests $1 billion in Airtel, takes 1.28% stake; will focus on affordable smartphones

New Delhi: Google will invest as much as $1 billion in Bharti Airtel in picking up a 1.28 per cent stake and in scaling up offerings of India’s second-largest mobile phone operator, the telecom major said on Friday. Alphabet Inc’s Google will pay $700 million (Rs 734 per share) for a 1.28 per cent stake in Bharti Airtel Ltd and the rest towards multi-year plans that will include devices. This will be the second investment by Google, which had two years ago committed to investing $10 billion in India via its digitisation fund over 5 to 7 years through equity deals and tie-up. It had in July 2020, invested $4.5 billion for a 7.73 per cent stake in billionaire Mukesh Ambani’s Jio Platforms. While the 2020 investment valued Jio Platforms’ equity at Rs 4.36 lakh crore ($58.1 billion), the $700 million investment announced on Friday values Bharti Airtel’s equity at Rs 4.1 lakh crore ($54.7 billion). The US tech behemoth got a seat on Jio’s board and has co-developed JioPhone Next - the world’s most affordable all-touchscreen smartphone running on Pragati OS an optimized version of Android OS. The funding from Google gives billionaire Sunil Mittal-led Bharti more firepower to bolster its 5G plans as well as take on market leader Jio. Google made the investment as part of its Google for India Digitization Fund. The amount Google invested in Jio was Rs 33,737 crore ($4.5 billion), which was 6.4 times its investment in Bharti Airtel at Rs 5,250 crore ($700 million). “This will comprise- $700 million equity investment in Bharti Airtel at a price per share of Rs 734,” Airtel said in a statement. Out of the total investment, $300 million will go towards implementing commercial agreements, which will include investments in scaling Airtel’s offerings that cover 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. “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,” the statement said. Bharti Airtel board has approved the issuance of up to 71,176,839 equity shares of face value of Rs 5 each of the company to Google International LLC on a preferential basis at a price of Rs 734 per equity share aggregating to Rs 5,224.3 crore (around $700 million). “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,” Bharti Airtel chairman Sunil Bharti Mittal said in the statement. Google CEO Sundar Pichai in July 2020, had announced a $10-billion Google for India Digitization Fund to help accelerate India’s digital economy. “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,” Alphabet and Google CEO Sundar Pichai said. Under the larger strategic goals of the partnership, both companies will work on the co-creation of India-specific use cases for 5G and other standards. “Airtel is already using Google’s 5G-ready evolved packet core and 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,” the statement said. As a part of its first commercial agreement, Airtel and Google will work together to build on Airtel’s extensive offerings that cover 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,” the statement said. The commercial arrangement includes the development of the cloud ecosystem in India which is one of the strategic interest areas and business drivers for Google. The partnership will enable Google to reach out to over 1 million small and medium businesses that are currently served by Airtel. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.