Google to invest up to $1 billion in Airtel as telco eyes affordable smartphone market

Airtel has announced that the investment from Google will be used to focus on access to affordable smartphones across price ranges, giving a blow to Reliance Jio that recently launched Jio Phone Next.

Airtel has announced Google has made an investment of up to $1 billion, which is more than Rs 7,500 crores, into the telecom arm as the race for affordable smartphones intensifies. The Sunil Mittal-led company said that the investment is a part of the Google for India Digitisation Fund, which Google announced back in 2020 to ramp up its efforts towards India. Google will invest $700 million in Airtel in exchange for 1.28 per cent ownership, while up to $300 million will be a part of potential multi-year commercial agreements between Google and Airtel.

Google's fresh interest in Airtel will allow the telecom company to navigate the affordable smartphone market more easily where it can focus on different aspects across price ranges. "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," said Bharti Airtel in a release.

This renewed partnership between Airtel and Google may come as a blow to Reliance Jio that, last year, launched the Jio Phone Next as its uber-cheap Android phone in exclusive partnership with Google for a forked version of the Android operating system called PragatiOS. Google made special announcements regarding PragatiOS, which will be crucial to India's low-end smartphone market. While Airtel has not specified what ways Google will assist it in to reach deeper into the smartphone market, Airtel may be planning to make a move against Jio.

Airtel also said that the investment from Google will allow it to continue its existing partnerships with the tech giant to potentially co-create India-specific network domain use cases for 5G and other standards. Airtel is already using Google’s 5G-ready Evolved Packet Core & Software Defined Network platforms. But it aims to scale up the deployment of Google's network virtualisation solutions "to deliver a superior network experience to their customers."

The partnership will also allow Airtel to shape and grow its cloud ecosystem in India, which it said will help it accelerate the digital transformation journeys of businesses in India. Airtel currently serves over one million small and medium businesses with its enterprise connectivity offerings.

“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,” said Sunil Bharti Mittal, Chairman of Bharti Airtel.

“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,” said Sundar Pichai, CEO of Google and Alphabet.