Google to invest up to $1 billion in Bharti Airtel as part of its India Digitization Fund

Indian telecom company Bharti Airtel and Google on Friday, January 28, 2022, announced that the two parties are now entering a long-term partnership agreement. As part of the deal, Google will now invest as much as USD 1 billion in India’s second-largest mobile phone operator. With the multi-year agreement, the two companies now aim to accelerate the growth of India’s digital ecosystem.

Alphabet Inc., which owns the Google search engine, in an exchange filing, had informed that it will pay USD 700 million for a 1.28 per cent stake in Bharti Airtel Ltd. It further said that another USD 300 million will go toward multi-year plans that will include devices built together by the two tech giants. The deal will see the two companies’ tie up to the race to offer inexpensive data and digital offerings in the only billion-people-plus market still open to foreign companies.

Google investment in Airtel

The USD 1 billion funding into India’s second-largest mobile phone operator, comes as part of Google’s USD 10 billion ‘Google for India Digitization Fund’. The programme was earlier announced by the CEO of Google and Alphabet Sundar Pichai in 2020. According to the company, the project will include equity investment as well as a corpus for potential commercial agreements with mutually agreeable terms over the next five years. Google, in a statement also informed that it will work with the Delhi based telecom company to improve the market situation in India.

“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,” the company said in a statement.

Why Google is investing in Bharti Airtel

According to the company statement, the partnership will focus on enabling affordable access to smartphones across price ranges, as well as exploring the potential to co-create India-specific network domains. The deal could also see the two companies side build a use case for 5G and help accelerate the cloud ecosystem for businesses across the digitally growing country.

However, the deal is yet to be finalised and are subject to regulatory approvals. The investment agreement comes only months after Airtel raised up to 210 billion rupees through a sale of shares to existing shareholders. Meanwhile, the Airtel shares saw a marginal rise after the announcement and were being traded at around Rs 718, as of 1 pm on Friday.

Image: PTI