Google inks $1bn deal with Bharti Airtel

Google plans to invest up to $1bn in a partnership with India’s Bharti Airtel in a wide-ranging deal to increase its footprint in the subcontinent.

Under the deal, which will be funded by the Google for India Digitisation Fund, Google will also make a $700m equity investment in Bharti Airtel. The deal is subject to regulatory approvals.

The remaining $300m will go towards implementing commercial agreements, which include efforts to lower the barriers of owning an Android smartphone across a range of price points through affordability programmes.

Both companies will also develop India-specific network domain use cases for 5G and other standards. Airtel is already using Google’s 5G-ready evolved packet core and software-defined network platforms and plans to scale up the deployment of Google’s network virtualisation solutions to improve network experience for its customers.

“Airtel and Google share the vision to grow India’s digital dividend through innovative products,” said Sunil Bharti Mittal, chairman of Bharti Airtel. “With our future ready network, digital platforms, last mile distribution and payments ecosystem, we look forward to working closely with Google to increase the depth and breadth of India’s digital ecosystem.”

Sundar Pichai, CEO of Google and Alphabet, noted that the deal will expand connectivity and ensure equitable access to the internet for more Indians.

“Our commercial and equity investment in Airtel is a continuation of our Google for India Digitisation Fund’s efforts to increase access to smartphones, enhance connectivity to support new business models, and help companies on their digital transformation journey,” he added.

On the cloud computing front, Google and Airtel said they will work together to grow the cloud ecosystem in India.

With access to Airtel’s business customer base of about one million small businesses and over 2,000 enterprises, Google could potentially increase its share of India’s buoyant cloud computing market through the deal.

Separately, Google is also working with Reliance Jio to support the latter’s efforts in building new services in gaming, healthcare, education and video entertainment. Jio will leverage its 5G network, software and Google Cloud’s artificial intelligence, machine learning, data and analytics, and other cloud-native technologies.

Google Cloud, which opened its second cloud region in India in Delhi in 2020, is being used by organisations in industries such as commerce, healthcare and financial services, as well as the public sector.

Rishu Sharma, principal analyst for cloud and artificial intelligence at IDC India, said the pandemic has accelerated the demand for public cloud services in India.

“Getting to the ‘next normal’ entails businesses to leverage cloud as part of their business plans. Irrespective of where the businesses are positioned across IDC’s ‘response to recovery’ framework, organisations state cloud is imperative in attaining their core business objectives,” she said.

IDC expects India’s public cloud services market to hit $7.4bn by 2024, growing at a compound annual growth rate of 22.2% between 2020 and 2024.

The top two cloud providers, Amazon Web Services and Microsoft, accounted for about half of India’s public cloud services market during the first half of 2020.