• Sunday, February 05, 2023

Business

Google to invest up to £746m in India’s Bharti Airtel

(Photo by NOAH SEELAM/AFP via Getty Images)

By: Shubham Ghosh

ALPHABET Inc’s Google is set to invest up to $1 billion (£746 million) in Indian multinational telecommunications services company Bharti Airtel as the US technology giant expands its base in India. The development sent shares of Airtel as much as 6.6 per cent higher on Friday (28).

The investment is part of Google’s plans unveiled less than two years ago to infuse $10 billion (£7.4 billion) in India through its digitisation fund over five to seven years through equity arrangements.

The American giant’s investment includes a $700 million (£522 million) equity investment in Airtel at Rupees 734 (£7.29) per share and up to $300 million (£224 million) towards implementing commercial agreements which include investments in expanding Airtel’s products and services, the companies said.

The investment will help Airtel develop its devices, home broadband, data centres, cloud adoption and over a period of time, 5G networks, Gopal Vittal, Bharti Airtel’s chief executive officer, India & South Asia, told analysts virtually on Friday.

“What this will do is actually fire up our digital agenda dramatically and that’s where we will double down and really go deep,” Vittal said but stopped short of elaborating on specific plans.

Shares of Airtel closed 1.2 per cent higher at Rupees 715.8 (£7.11) on Friday after rising as much as 6.6 per cent to a two-month high earlier in the session.

India’s telecom market has been hit hard by a price war in the last few years after Jio, led by India’s richest man Mukesh Ambani, entered the market in late 2016.

Airtel, India’s second-biggest carrier, has said it will slowly raise prices and in 2021, raised up to Rupees 210 billion (£2 billion) to slash debt and fuel growth.

The Google investment is set to help Airtel give its customers affordable smartphones, build 5G and accelerate the cloud ecosystem for small and medium enterprises, Aliasgar Shakir, a telecom analyst at Motilal Oswal Financial Services, told Reuters.

Indian conglomerate Reliance Industries’ digital unit Jio Platforms, which houses Jio, received an investment worth $4.5 billion (£3.3 billion) from Google in July 2020.

Months later, the companies launched a low-cost 4G smartphone with a tweaked Android operating system targeting first-time smartphone buyers.

With Jio and Airtel, Google now covers nearly 75 per cent of India’s smartphone market, Mumbai-based Ambit Capital analyst Vivekanand Subbaraman said.

“I think once a player has put in money, that’s stepping on the gas,” he told the news outlet, adding, “There will be more that we will get to know in the days to come.”

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