Google takes a stake in Bharti Airtel as part of $1 billion deal
- Google to invest $1 billion in partnership with India’s second largest mobile operator
- Digital platforms giant to take a 1.28% stake in Bharti Airtel
- Partnership will focus on affordable mobile device access, 5G use cases and India’s cloud ecosystem
- The two companies are already working closely on virtualized packet core and other functions
Google has cemented itself a role at the heart of digital communications developments in India with a $1 billion commitment to a partnership with the country’s second largest operator, Bharti Airtel.
Google will spend $700 million on buying a 1.28% stake in Bharti Airtel, while the remaining $300 million will be invested in “multi-year commercial agreements” that will be identified and agreed during the course of the next five years.
Those commercial agreements will include “investments in 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.”
The $1 billion investment is part of the broader $10 billion Google for India Digitization Fund announced by the company’s CEO Sundar Pichai in July 2020.
The first commercial agreement between Google and Airtel will focus on the development of “affordability programs” that can help get more Android-enabled devices into more people’s hands. “Together, the companies will continue to explore further opportunities to bring down the barriers of owning a smartphone across a range of price points, in partnership with various device manufacturers.
And in preparation for the introduction of 5G into India – the country’s 5G spectrum auctions could take place in late H1 this year if various parties can agree on what is actually up for grabs and at what price – the two companies are to develop “India-specific network domain use cases for 5G and other standards.”
And in what is an interesting revelation, Airtel noted in the announcement of the deal that it is “already using Google’s 5G-ready Evolved Packet Core & Software Defined Network platforms, and plans to explore scaling up the deployment of Google’s network virtualisation solutions.”
Anything that is co-developed, of course, will therefore be ‘developed in India,’ which is what the country’s authorities are encouraging: Both Bharti Airtel and the country’s mobile market leader Reliance Jio are both intending to develop their next-gen telco platforms using technology developed in the domestic market.
It’s worth noting too that Google is also working closely with Jio: The two have developed a smartphone operating system called Pragati specifically for the Indian market which already runs on the ‘entry level’ JioPhone Next 4G smartphone, with a 5G model already in development. (See Reliance Jio prepares for its next round of disruption.)
And they are also jointly developing 5G applications and products for the Indian market.
And that relationship, just like the one with Bharti Airtel, is underpinned by a capital investment: In July 2020, Google announced it was buying a 7.73% slice of Jio Platforms, which counts Reliance Jio amongst its assets, for about $4.5 billion.
The deals work for both parties in each case. For Google, the more people who are online and using digital services and apps, especially if they are running on Google’s Android OS or a derivative, the better it is for its business, and there are still many people in India who would benefit from better, faster data connections.
For Airtel and Jio, they gain from Google’s massive R&D initiatives, including, of course, those aimed specifically at the telecoms market. Anthos for Telecom, the version of the cloud-based managed application platform designed specifically to enable telcos to run applications at the edge of the network, looks like being a key one for the operator community and has ben proving popular. (See Google’s Anthos is winning telco buy-in.)
For Airtel, which has a mobile customer base of around 350 million (Jio has more than 420 million), the investment comes only weeks after it abandoned a corporate restructuring plan that would have seen its telecoms services business spun out into a separate subsidiary.
And it almost goes without saying that Google isn’t alone in digging its feet into the Indian market: Its hyperscaler rivals AWS and Microsoft Azure are also brokering deals and partnerships that will give them a slice of the action in what is the world’s second largest country by population.
- Ray Le Maistre, Editorial Director, TelecomTV
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