Daily Times

Google will invest as much as $1 billion in India’s second-largest mobile phone operator, as firms race to offer inexpensive data and digital offerings in the only billion-people-plus market still open to foreign companies. Alphabet, which owns the Google search engine, will pay $700 million for a 1.28 percent stake in Bharti Airtel, the New Delhi-based company said as reported by Bloomberg.

Google’s investment in Bharti is awaiting regulatory approvals, the company said. Another $300m is part of a corpus that will be invested over five years in the areas of devices, network and cloud technologies, Gopal Vittal, Bharti’s chief executive for India and South Asia, said.

Asia’s third-largest economy is a key growth driver for Silicon Valley, especially after China’s crackdown on its technology sector. The move to invest in the wireless carrier could be complementary to Google’s other investment in India — it bought a $4.5bn stake in billionaire Mukesh Ambani’s Jio Platforms in 2020 and has co-developed a cheaper smartphone — riding on Prime Minister Narendra Modi’s flagship “Digital India” programme. Bharti’s shares surged 1.2 per cent to 715.8 rupees ($9.54) on Friday after the announcement that Google was buying into the carrier at 734 rupees per share. The benchmark S&P BSE Sensex index slipped 0.1 per cent on the day. The investment “is a continuation of our Google for India Digitisation Fund’s efforts to increase access to smartphones, enhance connectivity to support new business models, and help companies on their digital transformation journey”, Sundar Pichai, chief executive of Google and Alphabet, said.

The funding from Google gives billionaire Sunil Mittal-led Bharti more firepower to bolster its 5G plans as well as take on Mr Ambani’s rival telecoms service, which went from being a disruptive entrant in 2016 to the country’s largest wireless provider within a few years by offering free calls and ultra-cheap data. Google is diversifying its commitments in the $10bn India fund following the Jio investment, said Alok Shende, principal analyst at consulting firm, Ascentius Insights. Both Bharti Airtel and Jio were safer bets, he added.

The partnership is more of a “foot-in-the-door” for the US company, Mr Shende said, and the relationship could expand if more material synergies develop.