Alphabet Inc’s Google will invest up to $1 billion in Bharti Airtel in a move that could help bolster the Indian telecom operator’s digital offerings, the companies said on Friday.
Google said it will invest $700 million to acquire a 1.28% stake in Airtel at a price of 734 rupees ($9.77) per share, the second largest telecom operator in India with over 300 million subscribers, and pour up to $300 million more to explore multi-year commercial agreements with the telco.
The two firms will work to expand Airtel’s offerings to cover a wide-range of Android-enabled devices to consumers via “innovative affordability programs,” they said. Google and Airtel will also explore partnerships with smartphone makers to make more affordable smartphones, they said.
The share issue is subject to regulatory and shareholder approval. And coming months after Airtel raised up to 210 billion rupees through a sale of shares to existing shareholders. Airtel shares were up 0.54% at 711 rupees after the announcement.
Google announced plans less than two years ago to infuse $10 billion in India. Via its digitisation fund over five to seven years through equity deals and tie-ups.
Friday’s announcement comes at a time when Airtel and Vodafone have been scrambling for ways to repay billions of dollars they owe to the Indian government. Vodafone gave away over 35% ownership to New Delhi earlier this month, making the Indian government its largest shareholder.
Vodafone and Airtel compete with Jio Platforms, run by Asia’s richest man Mukesh Ambani. Jio Platforms has amassed over 400 million subscribers in India, thanks to its cut rate voice calls and data offerings. Google invested $4.5 billion in Jio Platforms in 2020. Facebook and nearly a dozen more firms have backed Ambani-controlled firm. In return, the U.S. tech behemoth got a seat on Jio’s board.