CCI Approves Google’s Acquisition of Minority Stake In Airtel
- ByStartupStory | July 1, 2022
On June 30, the Competition Commission of India (CCI) authorised Google’s proposed acquisition of a 1.28 percent stake in the major telecom company Bharti Airtel.
“The acquirer (Google) and the target (Airtel) have signed an investment agreement (IA) under which the acquirer plans to buy a minority and non-controlling position of 1.28 percent of the equity share capital of the target… According to the CCI’s announcement, the commission authorised the planned combination in light of the acquirer’s changes. Along with the investment arrangement, both businesses have made a number of business agreements through their affiliates. Additionally, it was indicated that the parties intended to enter into other business agreements in the future.
The approval comes almost five months after it was revealed that Google would pay $700 million to acquire a 1.28 percent interest in Airtel. The funding came from the bigger Google For India Digitization Fund, which the company’s chief executive officer (CEO), Sundar Pichai, announced in July 2020.
In accordance with the agreement, Google and Airtel will collaborate to expand the telco’s enterprise cloud products, which it now offers in partnership with Amazon. The main goal of the agreement will be to give both parties the ability to collaborate in order to develop a variety of cost-effective Android devices in alliance with other device producers. The agreement will also allow the two parties to create 5G use cases particular to India and multiple network options as 5G auctions get near.
The CCI’s approval comes as Airtel and Reliance Jio are competing for market dominance in the nation’s telecom market. Jio held a 35.5 percent share of the wireless communication market in India as per the most recent data from the Telecom Regulatory Authority of India (TRAI) for April. With a 31.61 percent market share, Airtel stood in second place.
In the January to March 2022 quarter, Airtel’s average revenue per user (ARPU) increased to INR 178, mostly due to higher rates, significant user growth, and one-time gains. The telco said that its consolidated net profit increased by 164 percent year over year (YoY) to INR 2,008 Cr. Airtel is currently getting ready to introduce its 5G services to the nation. The Union Cabinet approved the auction of 72 GHz of 5G spectrum earlier in June, and it will take place in July 2022.
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