Google now has a finger in both the consequential pies of the Indian telecom space.
Google has announced an investment of up to $1 billion in partnership with Bharti Airtel. This includes a $700 million equity investment in Bharti Airtel for a 1.28 per cent stake, and up to $300 million towards potential multi-year commercial agreements. Google had earlier acquired a 7.7% stake in Reliance Jio for $4.5 billion.
The companies said in a statement that they recognise the importance of a “Connected India” in empowering businesses as they progress on their Digital Transformation journeys, and building a strong digital ecosystem for consumers everywhere. “Both organisations are committed towards working to build an open technology ecosystem that serves customers and businesses with innovative digital services, and have agreed to jointly explore and invest across a wide spectrum of areas to create digital solutions that uniquely serves India’s requirements,” the statement said.
And like Jio has partnered with Google to make feature phones and smart phones, Google will also help Airtel make a range of affordable Android-based devices. In the statement, Airtel and Google have hinted at making smartphones more affordable for Indian users. The statement reads that the two companies “aim to bring down the barriers of owning a smartphone across a range of price points, in partnership with various device manufacturers,” meaning that the two plan on partnering for making smartphones more affordable in India.
The deal gives Google a say in virtually the entire telecom sector in India — Jio and Airtel are the two biggest players in the space, and together currently command more than 75 percent of the market-share. It makes sense for Google to be invested in these companies — Jio and Airtel control the pipes through which Google’s internet-based products reach India’s consumers, and with these investments, Google ensures that they remain on its side. But what’s unusual about the deal is how Google has invested in two direct competitors — most companies refrain from investing in companies that are rivals, but Google has managed to wedge itself into both Jio and Airtel. It remains to be seen how the Jio and Airtel rivalry plays out in the coming years, but Google’s now ensured that it’ll come out trumps either way.