Alphabet INC’s Google will invest USD $1 million in Bharti Airtel, the Indian telecom Operator. The move is expected to bring favorable results for the telecom operator in terms of its digital offerings.
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Why Is Google Making The Investment?
This USD $1billion investment of Google includes an equity investment of USD $700 in Airtel at a price of USD $9.77 Per share (Rs 734). In this way, the search-engine giant will acquire a 1.28% stake in the 2nd largest Telecom Operator in India. In addition, it would gush up to USD $300 million for implementing multi-year commercial agreements and uplifting the company’s offerings. But
This issuance of this share is subject to shareholder and regulatory approval. It arrived several months after Rs 21000 was raised by selling shares to the present shareholders. Post the announcement, Airtel shares were up 0.54% at Rs711.
What’s Pichai’s Viewpoint On This Investment?
It seems that this investment is a part of the digitization plan Google announced 2 years back to saturate $10 billion in India over 5-7 years. Initially, it was decided to do this through tie-ups and equity deals. There is evidence of Google and Conglomerate Reliance Industries Ltd’s Digital Unit Jio Platforms partnering in July 2020. It happened when the US Tech Behemoth invested USD $4.5 billion in Jio.
Sundar Pichai is quite hopeful with the current investment plan. He said in a statement, “Airtel is a leading pioneer shaping India’s digital future, and we are proud to partner on a shared vision for expanding connectivity and ensuring equitable access to the Internet for more Indians.
Pichai continues, “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.”
Our Verdict On This
This investment is going to be a new ray of hope for the Telco. Google, in collaboration with Airtel, will be traversing the smartphone makers’ partnerships in order to make the new models affordable. So, it’s evident that a lot more surprises are on their way for the Bharti Airtel users in the coming months.
Let’s catch our breath till then!