Internet giant Google will invest $1 billion in telecom major Bharti Airtel which includes equity investment as well as a corpus for potential commercial agreements, to be identified and agreed on mutually agreeable terms over the course of the next five years.
Google made the investment as part of its Google for India Digitization Fund.
"This will comprise- $700 million equity investment in Bharti Airtel at a price per share of Rs 734," Airtel said in a statement.
Out of the total investment, $300 million will go towards implementing commercial agreements, which 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.
"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 statement said.
Bharti Airtel board has approved the issuance of up to 71,176,839 equity shares of face value of Rs 5 each of the company to Google International LLC on a preferential basis at a price of Rs 734 per equity share aggregating to Rs 5,224.3 crore (around $700 million).
"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.
Google CEO Sundar Pichai in July 2020, had announced a $10-billion Google for India Digitization Fund to help accelerate India's digital economy.
Thereafter, the internet major invested Rs 33,737 crore (about $4.5 billion) to buy 7.73 per cent stake in Jio Platforms just a couple of days after it made an announcement about the fund.
"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," Alphabet and Google CEO Sundar Pichai said.
Under the larger strategic goals of the partnership, both companies will work on co-creation of India-specific use cases for 5G and other standards.
"Airtel is already using Google's 5G-ready evolved packet core and software defined network platforms, and plans to explore scaling up the deployment of Google's network virtualisation solutions to deliver a superior network experience to their customers," the statement said.
As a part of its first commercial agreement, Airtel and Google will work together to build on Airtel's extensive offerings that covers a range of Android-enabled devices to consumers via innovative affordability programs.
"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," the statement said.
The commercial arrangement includes development of the cloud ecosystem in India which is one of the strategic interest areas and business drivers for Google.
The partnership will enable Google to reach out to over 1 million small and medium businesses that are currently served by Airtel.
Google has already partnered with Jio to help them develop low cost Android devices.