Mumbai/ Pune/ Chennai: Google’s plans to invest $1 billion in Bharti Airtel and their cooperation in the cloud space will accelerate the Mountain View-headquartered Internet giant’s digital ambitions in one of its largest markets, India, making it a stronger competitor to larger rivals Microsoft and AWS, say experts.They added that the tie up will help Google focus especially on the small and medium business (SMB) market where Airtel has a strong foothold. “Clearly, Google is fighting…
Alphabet Inc’s Google will invest up to $1 billion in India’s Bharti Airtel as the U.S. technology giant expands its hold in India, sending shares of the telecom operator as much as 6.6% higher on Friday.
The investment is part of Google’s plans announced under two years ago to infuse $10 billion in India via its digitisation fund over five to seven years through equity deals and tie-ups.
Google’s investment includes a $700 million equity investment in Airtel at 734 rupees ($9.77) per share and up to $300 million towards implementing commercial agreements, including investments in expanding Airtel’s products and services, the companies said.
The investment will help Airtel develop its devices, home broadband, data centres, cloud adoption and, over a period of time, develop 5G networks, Bharti Airtel’s CEO, India & South Asia, Gopal Vittal told analysts on a conference call on Friday.
“What this will do is actually fire up our digital agenda dramatically and that’s where we will double down and really go deep,” Vittal said, without elaborating on specific plans.
Shares of Airtel closed 1.2% higher at 715.8 rupees on Friday after rising as much as 6.6% to a two-month high earlier in the session.
STEPPING ON THE GAS
In the last few years, India’s telecom market has been hit hard by a price war after Jio, controlled by India’s richest man Mukesh Ambani, entered the market in late 2016 with free voice calls and cut data prices.
Airtel, India’s second-biggest carrier, has said it will gradually raise prices and, last year, raised up to 210 billion rupees to cut debt and fuel growth.
The Google investment will help Airtel give its customers affordable smartphones, build 5G and accelerate the cloud ecosystem for small and medium enterprises, said Aliasgar Shakir, a telecom analyst at Motilal Oswal Financial Services.
Conglomerate Reliance Industries’ digital unit Jio Platforms, which houses Airtel’s rival Jio, received a $4.5 billion investment from Google in July 2020.
Months later, the companies launched a low-cost 4G smartphone with a tweaked Android operating system aimed at first-time smartphone buyers.
With Jio and Airtel, Google now covers nearly 75% of India’s smartphone market, Ambit Capital analyst Vivekanand Subbaraman said.
“I think once a player has put in money, that’s stepping on the gas,” he said. “There will be more that we will get to know in the days to come.”
https://cio.economictimes.indiatimes.com/news/cloud-computing/google-doubles-down-on-cloud-with-airtel-deal/89192769
