Google is spending up to $1 billion in a major Indian telecom business in the goal of lowering smartphone prices in a vast and quickly growing market.
In a statement released Friday, Google said it would invest $700 million in Bharti Airtel, India’s second-largest telecom operator, for a 1.28 per cent share. The companies said that an additional $300 million would be used for prospective multi-year commercial deals.
According to Airtel, the two firms intend to “bring down the obstacles of owning a smartphone across a range of pricing points” by working with device manufacturers. They also want to collaborate in the country on 5G and cloud services.
The deal, which still requires to be approved by regulators, is the latest foray by Google into a market that has become increasingly important for Big Tech businesses aiming that have the ambition to expand their global reach.
India, the second-most populous country in the world, currently has 750 million internet users, while hundreds of millions more are to be brought into the net.
And, unlike the most populous neighbor China, India has welcomed massive sums of American tech investment. Top American tech giants such as Facebook, Google, Amazon, Netflix, and other companies have already committed billions of dollars in expanding their operations in the country.
Google has already invested heavily in India, which includes an investment of $4.5 billion in Jio Platforms, an Airtel competitor that is part of Mukesh Ambani’s internet empire, two years ago.
The partnership was billed as a chance for the firms to collaborate on a low-cost smartphone for the domestic Indian market. Late last year, they released their first low-cost 4G smartphone.
The deal with Airtel was a “continuation” of Google’s efforts to “increase access to smartphones, enhance connectivity to support new business models, and help companies on their digital transformation journey,” said Sundar Pichai, CEO of Alphabet and its subsidiary Google, in a statement.
Since the announcement of the deal, stocks of Airtel have risen by 1.5 per cent. The mobile service provider currently has about half a billion customers in 17 countries across South Asia and Africa.
(Adapted from CNN.com)