Internet giant Google will invest $1 billion in Bharti Airtel — $700 million in a 1.28 per cent equity in India’s No.2 telecom player and another $300 million to scale up Airtel’s digital products, including 5G services.
Airtel said its board has approved the issue of up to 7.1 crore equity shares of face value of Rs 5 each to Google International LLC on a preferential basis at a price of Rs 734 per share aggregating to Rs 5,224.3 crore (around $700 million).
Another $300 million will go towards implementing commercial agreements, which will 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.
“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,” the Airtel statement said.
The share issue is subject to regulatory and shareholder approval and comes months after Airtel raised up to Rs 21,000 crore through the sale of shares to shareholders.
Airtel shares were up Rs 8.70, or 1.23 per cent, at Rs 715.90 on the BSE on Friday.
Google announced plans less than two years ago to infuse $10 billion in India via its digitisation fund over 5-7 years through equity deals and tie-ups.
Reliance Industries’ digital unit Jio Platforms, which houses Airtel’s telecom rival Jio, received an investment of $4.5 billion (Rs 33,737 crore) from Google in July 2020 for a 7.73 per cent stake in the company. In return, the US tech behemoth got a seat on Jio’s board.
“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,” Bharti Airtel chairman Sunil Bharti Mittal said in the statement.
“Our commercial and equity investment in Airtel is a continuation of our Google for India Digitisation Fund’s efforts to increase access to smartphones, enhance connectivity to support new business models, and help companies on their digital transformation journey,” Alphabet and Google CEO Sundar Pichai said.