The tech giant will acquire a 1.28% stake in the company for $700 million, with up to an additional $300 million being invested in joint commercial opportunities
Back in 2020, Google announced plans to invest $10 billion in India over the next five-to-seven years, via the newly created the Google for India Digitization Fund.
At the time, Google noted that the investments would be a mix of equity acquisitions, partnerships, and operational and infrastructure deals, with a focus on helping provide Indian customers with services meeting their unique needs.
Just a few months after launch, the India Digitization Fund made its first major investment, spending $4.5 billion for a 7.7% share India’s largest telco Reliance Jio.
The move chased a similar move by Facebook, who had purchased a 9.99% stake in Jio for $5.7 billion in April. In total, various investors including Google and Jio took a 33% stake in the operator, raising around $20 billion.
Since Google’s investment in Jio, the pair have collaborated to launch the JioPhone Next, the Indian operator’s first smartphone, at the end of 2021, following delays caused by the ongoing semiconductor shortage.
Throughout 2021, Google’s India Digitalisation Fund continued to make further investments, covering sectors including digital content, banking, and business support services for SMEs. Some notable partners include Verse, Open, DotPe, and Glance.
Now, however, Google is lining up a new investment of a much greater scale, once again seeking to take advantage of the privileged position mobile operators offer when it comes to digital outreach.
Today, Google has announced that it will invest up to $1 billion into India’s second-place telco, Bharti Airtel, aiming to bolster the operator’s digital offerings.
Around $700 million of the investment will go towards purchasing a 1.28% stake in the operator, with up to a further $300 million earmarked for investment into joint projects and multi-year agreements.
According to the partners, this deal will seek to expand Airtel’s offerings over the Android platform, as well as enabling collaboration for the creation of more affordable smartphones.
“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,” said Sundar Pichai, chief executive of Google and Alphabet.
Naturally, this investment is subject to regulatory approval.
The fresh investment will be a major boost for Airtel, arriving at a time when the company is under pressure from the government to pay billions of dollars in adjusted gross revenue fees. However, a recent relief package for the Indian telecoms sector announced by the government has removed some of the immediate threat to Airtel’s business, with the company’s leadership subsequently announcing that they would not have to restructure the business after all, as was once feared.
India is viewed as an incredibly attractive market for the world’s largest tech firms, with a huge population and relatively low level of digitalisation. Around 50% of the Indian population is still unconnected to the internet, with around 60 million small and medium-sized enterprises still lacking connectivity.