News Update

1.28% Stake in Bharti Airtel costing $700 Mn now owned by Google

• ByStartupStory     |    February 28, 2022

The stakeholders of the telco have approved Google’s purchase of a 1.28% stake in the company worth $700 Mn, in an extraordinary general meeting organized by Bharti Airtel on February 26th. The proposal was approved by the stakeholders almost unanimously, paving the way for Google to pick up a stake in the second Indian telco within 24 months. The stakeholders passed a special resolution at the EGM, that will see Google pick up a stake in the telecommunications company, alongside multiple business deals, also funded by Google.

Notably, Airtel will receive a long-term investment over the next five years, as the companies put it, which in turn will allow the telco to tackle the upcoming 5G challenges. In July 2020, Sundar Pichai announced that this investment comes under the Google For India Digitisation Fund. “The Silicon Valley giant will invest $10 Bn in India, to deliver affordable connectivity across the country”, said Pichai.  With regard to this, it had bought a 7.73% stake in Jio, and that partnership delivered the Jio Phone Next, one of the cheapest 4G smartphones in the world.

Dividing the deal into two parts: Google will decides to pick up 71,176,839 in Airtel, at INR 734 per share, for around $700 Mn. Presently, Airtel has been working on 5G use cases, with the 5G spectrum auction imminent. Coupled with the amount of passive infrastructure required for the next generation of mobile networks, it will cost the telco a pretty penny. As airtel keeps mounting the pressure on Reliance Jio at the top of the Indian telecom industry, this investment will help Airtel’s cause quite a lot.

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