On Friday, January 28, 2022, Bharti Airtel and Google announced a long-term, multi-year deal to accelerate the expansion of India’s digital ecosystem, in which Google aims to invest up to USD 1 billion.
The sum is part of the USD 10 billion ‘Google for India Digitization Fund,’ announced by Sundar Pichai, CEO of Google and Alphabet, in 2020, and will include equity investment as well as a corpus for potential commercial agreements, to be identified and agreed on mutually agreeable terms over the next five years, the companies said in a statement.
“Together, they will collaborate to provide best-in-class end-to-end products to suit consumer demands, provide excellent customer experience, and contribute their knowledge to tackle affordability, access, and digital inclusion concerns,” they added.
The transaction involves a USD 700 million investment to acquire 1.28 per cent ownership in Airtel, as well as up to USD 300 million in possible multi-year commercial agreements. The collaboration will focus on enabling affordable access to smartphones across price ranges and will continue to investigate expanding on their existing collaborations to potentially co-create India-specific network domain use cases for 5G and other standards, as well as help, accelerate the cloud ecosystem for businesses across India.
Network domain-specific to India
According to the announcement, as part of their first commercial partnership, Airtel and Google will collaborate to expand on Airtel’s comprehensive offers to consumers, which include a variety of Android-enabled devices, through new affordability schemes. In collaboration with other device makers, the firms will continue to explore more options to lower the barriers to owning a smartphone across a range of price points.
“As part of the partnership’s bigger strategic ambitions, both businesses may co-create India-specific network domain use cases for 5G and other standards, including cutting-edge implementations.” “Airtel is already employing Google’s 5G-ready Evolved Packet Core and Software Defined Network platforms, and wants to scale up the implementation of Google’s network virtualization technologies to provide a superior network experience to its customers,” the company said.
To speed their digital transformation journeys, both organizations will also focus on building and developing the cloud ecosystem in India.
“Airtel and Google share the ambition of growing India’s digital dividend via innovative products,” stated Sunil Bharti Mittal, Chairman of Bharti Airtel. We look forward to working closely with Google to expand the depth and breadth of India’s digital ecosystem with our future-ready network, digital platforms, last-mile distribution, and payments environment.”
“Our commercial and equity investment in Airtel is a continuation of our Google for India Digitization Fund’s efforts to boost access to smartphones, improve connectivity to promote new business models and assist organizations on their digital transformation path,” Mr Pichai continued.
At 10.08 a.m., Bharti Airtel shares were trading 1.85 per cent higher on the BSE at 720.30 a share.