After investing Rs 34,000 crore in Jio, Google to make ‘huge’ investment in Airtel
Google had invested a whopping Rs 33,737 crore in Reliance industries digital subsidiary, Jio Platforms Ltd. And now, Alphabet Inc’s Google is in the final stages of talks with billionaire Sunil Mittal-led Bharti Airtel for the ‘past nearly one year’, and the deal size could be ‘substantially large’
The companies Google and Airtel have reportedly reached an advanced stage of discussion. It is believed that Google will make “substantial investments, running into several thousands of crores of rupees”.
Notably, Airtel had a debt of nearly Rs 1.6 lakh crore in June. So if the deal between Google and Airtel materialises, it would be a huge breather for Sunil Mittal-led telecom company.
Bharti Airtel is already looking to raise capital so that it can invest it on its 4G networks around the country to increase capacity. Jefferies believe that since there’s no urgent need of raising cash, the telco is likely assuming that it will need a larger capacity network to hold all the Vodafone Idea (Vi) customers that come its way, Telecom Talk reported.
“The entry of Google adds strength to the balance sheet of Airtel. Also, it helps the company strategically as Google brings in innovation capabilities and strength on data analytics. Google’s data monetisation is far superior to any other company in the world, and it can help Airtel monetize its data much better to improve its realisations and profitability,” a top analyst told TOI about the Google-Airtel deal.
In July 2020, Google invested $4.5 billion in Jio Platforms, taking a 7.73 percent stake in the company. This was the first investment from Google under its India Digitisation Fund, through which it plans to invest $10 billion over the next five to seven years to accelerate its digital economy.
Google and Jio Platforms also entered into a commercial agreement to jointly develop an entry-level affordable smartphone with optimisations to the Android operating system and the Play Store, an effort that would help millions of users in India become owners of smartphones.
Unleashing a disruption in the telecom market in India in 2016, Jio offered customers lifetime free voice, which gave 75 per cent to the telecom industry’s revenues then, putting other telcos such as Airtel, Vodafone India and Idea Cellular, under huge pressure. The financial burden mounted following the Supreme Court ruling on adjusted gross revenue (AGR) related dues.
