Google Continues Its Push Into India With $1 Billion Bet on Telecom Giant Airtel

Airtel Is India’s Second-Largest Telecom Operator, Google Snags A Stake

Alphabet’s (GOOGL) Google is placing a big bet on Indian telecom operator Airtel, investing upwards of $1 billion in the company. This follows a series of investments made by the US tech giant in India, which is the world’s second-largest internet market. Google executives say they will ultimately invest $10 billion in projects there.

Airtel has 300 million subscribers and ranks as India’s second-largest telecom operator. This investment from Google will break out into a $700 million acquisition of a 1.28% stake in Airtel and then $300 million put toward exploring multi-year partnerships. Both companies will also reportedly look for ways to partner with other businesses in a push to produce more affordable smartphones.

Telecom Competition Robust in India, and Airtel Has Bills to Pay

The deal comes at a time when Airtel is looking for ways to come up with cash. All three of India’s top telecom operators are locked in a pricing war, and data in the country is among the world’s cheapest. As a result, Airtel currently owes the Indian government the equivalent of $13.2 billion after taking out loans.

Airtel’s chief competitors are Vodafone (VOD) and Jio Platforms. Vodafone also owes the Indian government money but decided to trade a 35.8% stake in the company to wipe clean its interest payments. Meanwhile, Jio is the market leader thanks to cut-rate prices. Google and Jio also partnered to produce a custom Android smartphone in the past.

Shaping the Cloud: Google and Airtel Partnership Goes Beyond Hardware

Airtel and Google indicate their deal is also focused on “shaping and growing” India’s cloud computing ecosystem. At present, over 1 million small-to-medium-sized businesses utilize Airtel’s enterprise connectivity package. Both companies’ executives say this agreement will benefit India’s entire digital ecosystem and accelerate the rate of digital expansion.

Industry observers identify India as one of the world’s final remaining growth markets, and American companies are looking for a piece of the action. Google and Meta Platforms (FB) have both introduced internet connectivity programs over the past 10 years that brought tens of millions of Indian residents online. This latest deal continues this trend and highlights tech’s larger focus on cloud computing.

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