Tech giant Google has announced a $1 billion investment in Airtel in a deal that will help shape India’s digital ecosystem. Out of the $1 billion (roughly Rs 7,500 crores), $700 million will go into acquiring a 1.28 percent stake in Airtel, while the rest $300 million will go towards a five-year commercial agreement which will see the two companies work together on several things like 5G, affordable smartphones, cloud infrastructure, and much more. While the deal is still subject to regulatory approvals, let us take a look at some of the key highlights and possible outcomes of this deal and what they mean.
1. Google To Acquire 1.28 Percent Stake in Bharti Airtel
Out of the $1 Billion (roughly Rs 7,500 crores), $700 million (roughly Rs 5,260 crores) will go into acquiring a 1.28 percent stake in Bharti Airtel, meaning that Google will own 1.28 percent of Airtel after this deal. Google got a 1.28 percent stake in Airtel at a price of Rs 734 per share.
2. $300 Million To Be Spent In Commercial Agreements
The rest of the $300 million (roughly Rs2,250 crores) will go towards the inititives Google and Airtel will work on together for the next five years. This includes the two companies working together to offer end-to-end products and services to serve customer needs, provide quality customer experience, and “bring their expertise to solve problems of affordability, access, and digital inclusion.”
3. Five-Year Deal Between Google And Airtel
The deal between Google and Airtel is a five-year commercial agreement. It includes several ventures and initiatives that the company’s will work on over the next five years in the country. In a statement, the companies talk about 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.”
4. Google-Airtel To Work On “Connected India”
In their statement announcing the deal, Google and Airtel said that they recognise the importance of a “Connected India” in empowering businesses as they progress on their Digital Transformation journeys. The company’s talked about building a strong digital ecosystem for consumers everywhere. “Both organisations are committed towards working to build 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 serves India’s requirements,” the statement said.
5. Plan To Make Smartphones More Affordable In India
Announcing the deal, both Airtel and Google have hinted at making smartphones more affordable for Indian users. The statement reads that the two companies “aim to bring down the barriers of owning a smartphone across a range of price points, in partnership with various device manufacturers,” meaning that the two plan on partnering for making smartphones more affordable in India.
6. More Affordable Android Devices From Airtel?
The deal also talks about Google’s support in helping Airtel make a range of affordable Android-based devices. While we know that the two companies will work together to make smartphones more affordable, will we see more Android-based devices from Airtel with Google’s help?
7. Google-Airtel Will Ramp Up 5G Coverage, Scale Other Standards
Further, Airtel and Google will also co-create India’s network domain use cases for 5G and other standards. The statement said that Airtel is already using Google’s 5G-ready Evolved Packet Core and Software Defined Netfork platforms, and further plans to scale up the delpoyment of Google’s network virtualisation solutions to deliver a superior network quality.
8. Will Inflate India’s Cloud Infrastructure
The two companies will also focus on shaping and growing the cloud ecosystem in India to accelerate their digital transformation journeys.
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