Global interest in India’s digital economy has continued to birth investments from the big names in the tech industry. Google, Amazon, Facebook, Apple and others are either setting up companies in India or putting money in companies of Indian origin.
In 2020, Google announced $10 billion investment fund for India’s digital economy, and that’s besides previous investments it had made. The $10 billion fund opens a new chapter in Google’s India investment spree, and many companies in the internet market are set to benefit.
As part of its $10 billion commitment to India, Google will invest $700 million in Indian telecom operator Airtel, tightening its grip on the world’s second largest internet market, TechCrunch has reported.
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Google said it will invest $700 million to acquire a 1.28% stake in Airtel, 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 said they will work to build on Airtel’s extensive offerings to cover a range of Android-enabled devices to consumers via “innovative affordability programs.” The companies also said they will explore partnerships with smartphone makers to “bring down the barriers of owning a smartphone across a range of price points.”
“Airtel is a leading pioneer shaping India’s digital future, and we are proud to partner on a shared vision for expanding connectivity and ensuring equitable access to the Internet for more Indians,” said Sundar Pichai, chief executive of Google and Alphabet, in a statement.
“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.”
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 backed Ambani-controlled firm that year.
Airtel said on Friday that it will explore “larger strategic goals” with Google and “potentially” co-create India-specific network domain use cases for 5G and other standards. The companies also plan to collaborate on “shaping and growing” the cloud ecosystem in India, they said. Airtel, which already serves over 1 million small and medium-sized businesses with its enterprise connectivity offering, said Friday’s announcement will “help accelerate digital adoption.”
“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,” said Sunil Bharti Mittal, Chairman of Bharti Airtel, in a statement.
With over 600 million internet users — and just as many yet to come online — India is one of the last great growth markets for American technology groups. Both Google and Facebook ran programs in the past decade to bring internet connectivity to tens of millions of Indians.