NEW DELHI: In what appears to be a bid to stop Mukesh Ambani-owned Jio’s unrelenting run in the telecom market, Bharti Airtel has tied up with Google in a deal that will see the US tech giant investing up to $1 billion in India’s second-largest telecom company. The deal includes an investment of $700 million to acquire 1.28% ownership in Airtel over the next five years and up to $300 million toward potential multi-year commercial agreements.
As per the partnership, Airtel and Google 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. Sundar Pichai, CEO of Google and Alphabet, said their commercial and equity investment in Airtel is a continuation of Google for India Digitization Fund’s efforts to increase access to smartphones, enhance connectivity to support new business models.
“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. Though experts believe such tie-ups will only strengthen the telecom market in the country benefitting all players, many see it as Airtel’s attempt at blunting competition from Jio Navkendar Singh, Research Director of IDC, thinks the partnership can be seen as an effort to counter Jio by going after the same base of half a billion telco consumers who use feature phones or no phone.
Last year, RIL Chairman Mukesh Ambani and Google CEO Pichai partnered to come up with the “most affordable smartphone” in the world. However, Prabhu Ram, Head of Industry Intelligence Group of CyberMedia Research (CMR), believes the headroom for growth in India’s smartphone market is immense, and more such initiatives would help swiften India’s digital transformation.
Faisal Kawoosa, Chief Analyst Techarc, opined that the country needs such tie-ups to expand its digital user base which present smartphones cannot do beyond a point. “Google will attempt such partnerships with multiple operators if it has to see India having more smartphone/ digital users which cannot come through a single operator,” said Faisal Kawoosa.