Jagran Explainer: Understanding the USD 1 bn Google-Airtel deal and how it will benefit the 2 companies

As part of the deal, Google will invest USD 700 million to acquire 1.28 per cent stake in Bharti Airtel at a rate of Rs 734 per share. The US-headquartered technology giant will also invest USD 300 million toward potential multi-year commercial agreements.

By Sugandha Jha
Sun, 30 Jan 2022 12:55 PM IST
Minute Read
Jagran Explainer: Understanding the USD 1 bn Google-Airtel deal and how it will benefit the 2 companies

New Delhi | Jagran Technology Desk: Google will invest USD 1 billion in partnership with Airtel to improve connectivity in India with a special focus on 5G and affordable smartphones, the two companies said in a joint statement recently.

As part of the deal, Google will invest USD 700 million to acquire 1.28 per cent stake in Bharti Airtel at a rate of Rs 734 per share. The US-headquartered technology giant will also invest USD 300 million toward potential multi-year commercial agreements.

What will this partnership bring?

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.

How will the investment work?

Up to USD 300 million that will go towards implementing commercial agreements include investments in scaling Airtel's offerings that cover a range of devices to consumers via innovative affordability programmes as well as other offerings aimed at accelerating access and digital inclusion across India's digital ecosystem.

"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 programmes. 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," the two companies said.

Google's interest in Airtel?

India is one of the most attractive markets for large technology players, with a population of 1.3 billion. The digital economy in the country is on an upward growth curve, with more first-time digital users from Tier-II, Tier-III cities and towns coming online, said Prabhu Ram, Head – Industry Intelligence Group, CyberMedia Research as quoted by Money Control.

Further, India is expected to see close to 500 million smartphone users in the next five years, with as many as 270 million feature phones users upgrading it to smartphones, according to Tarun Pathak, Research Director, Counterpoint as quoted by Money Control.

As a result, given the high consumption rate in the Indian market, major tech players in the US, like Amazon, Apple, and Meta are looking at India for future growth opportunities.

What is in it for Google and Airtel?

Airtel is 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 virtualization 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 statement said.

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.

(With inputs from ANI)

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