Airtel: After Jio deal, Google is investing $1 billion in Airtel now

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New Delhi: Sunil Mittal subsidiary Airtel has secured $1 billion in ‘strategic financing’ from Google as the US tech giant expands its investment reach in India beyond the $4.5 billion (Rs 33,737 crore) it signed with Mukesh Ambani’s Reliance Jio in July 2020. The deal with Airtel will be funded by Google’s $10 billion Indian Digitization Fund, and the company will invest $700 million for a 1.2% stake in Airtel at Rs 734 per share (closed today at Rs 717 on the Bombay Stock Exchange on Friday). The remaining $300 million will be spent on areas such as affordable smartphone development, as well as accelerating digital inclusion, including network domain use cases for 5G and cloud growth. TOI was the first to report on Google’s plans to make financial investments in Airtel in its August 28 editions last year. While investments in Jio Platforms have come in at $58.1 billion (Rs.4.36 thousand crore) for Ambani, Airtel’s financing comes in at a valuation of $54.7 billion (Rs.4.1 thousand crore). Airtel and Mittal will be looking to ride the partnership with Google to gain valuable insights into the development of affordable smartphones – something that helped Jio create the JioPhone Next – apart from boosting their entry into 5G. Airtel said Google’s partnership with Jio Platforms, where it also took a board position, does not conflict with any deal. Sunil Bharti Mittal, Chairman of Bharti Airtel, said the companies had a vision to grow India’s digital profits through innovative products. “With our future-ready network, digital platforms, last-stage distribution and payment system, we look forward to working closely with Google to increase the depth and breadth of India’s digital ecosystem,” he said. Sundar Pichai, CEO of Google and Alphabet, said the two companies have a “shared vision” to expand connectivity and ensure equitable access to the internet for more Indians. “Our commercial and investment investment in Airtel is a continuation of the Google for India Digitization Fund’s efforts to increase access to smartphones, enhance connectivity to support new business models and assist companies in their digital transformation journey,” Pichai said. Under the larger “strategic goals” of the partnership, both companies will look to co-create India’s own network domain use cases for 5G and other standards with cutting-edge applications. Airtel is already using Google’s 5G-ready, software-defined network platforms and plans to explore scaling up the deployment of Google’s network virtualization solutions to deliver a superior network experience to its customers. The companies will also focus on shaping and growing the cloud ecosystem in India to accelerate their digital transformation journeys. Airtel serves more than one million small and medium businesses through its enterprise connectivity offering, and this partnership is likely to help accelerate digital adoption. Prashant Singhal, Head of Communications at Ernst & Young India, said that apart from playing in India, the partnership also has the potential to positively impact Airtel’s operations across Africa. “There will be ripple effects. We feel Google’s heavy focus on India is a huge confidence booster for the local industry, as well as for Airtel. This partnership will help make 5G use cases faster in the market, apart from developing affordable hardware and cloud infrastructure.” When asked whether Airtel will continue to provide cloud services to other operators such as AWS and Oracle, Airtel CEO Gopal Vittal said that Google’s partnership is not exclusive in nature: “We will continue to work with multiple partners. There is no exclusive for either partner.” He said Airtel will continue to invest in network expansion and other business areas, such as home broadband, data centers and 5G networks. “We invest about $2.5 billion annually, and those investments will continue.” .

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