India's No. 2 mobile-phone operator Bharti Airtel announced that it will receive a US$ 1 billion investment from Google as part of its Google for India Digitization Fund.
The $1 billion investment includes equity investment as well as a corpus for potential commercial agreements over the course of the next five years. Google will make a $700 million equity investment to acquire 1.28% ownership in Bharti Airtel at a price per share of INR 734.
"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," said a press release from Airtel.
The partnership will focus on enabling affordable access to smartphones across price ranges and will continue to explore building on their existing partnerships to potentially co-create India-specific network domain use cases for 5G and other standards, and help accelerate the cloud ecosystem for businesses across India.
This deal will be subject to necessary regulatory approvals, said the release.
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.
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.
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.
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 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.”