Internet search giant Google will invest upto $1 billion in Bharti Airtel through an equity purchase of 1.28% and commercial agreement on mutual terms over the next five years.
Google will invest the amount, as part of its Google for India Digitization Fund in the country's second largest telecom services provider, making it the only company to have invested in both Reliance Jio and Bharti Airtel.
The investment includes $700 million equity investment in Bharti Airtel at a price per share of Rs 734 and $300 million 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.
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.”
The commercial agreements will be identified and agreed on mutually agreeable terms over the course of the next five years, the companies said in a statement on Friday.
The announcement was made after the proposal was approved by the Airtel Board on Friday. Airtel's shares were up 0.7% at Rs 711.95 on the Bombay Stock Exchange as of 9 40 am.
This deal will be subject to necessary regulatory approvals.
"As a part of its first commercial agreement, Airtel and Google will work together to build on Airtel’s extensive offerings that covers a range of Android-enabled devices to consumers via innovative affordability programs," the companies said.
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, they added.
“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, CEO of Google and Alphabet.
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 said that it was already using Google’s 5G-ready Evolved Packet Core and 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.
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.