Airtel has sold a 1.28% stake toGoogle for $700 million, further deepening its ties with the Android maker.- In addition to this, Google will also plough in about $300 million that will go towards various strategic initiatives, including a smartphone affordability programme.
- Airtel is currently India’s second largest telecom provider.
According to the announcement made by the
Airtel’s shares were up by over 1.5% at 10:00 a.m., today (January 28).
While the $700 million stake acquisition is a fairly important aspect of Google’s $1 billion investment in Airtel, there is another aspect that might have a major impact on the telco’s performance and its subscribers.
“Together, the [two] companies will continue to explore further opportunities to bring down the barriers of owning a smartphone across a range of price points, in partnership with various device manufacturers,” Airtel said in a statement.
This means that we could see Airtel etch out partnerships with smartphone companies to offer smartphones at subsidised prices. It’s not really a new concept even for the Indian market, but the scope so far has been significantly limited. Telecom companies have usually offered discounts on major high-end phones like the iPhone.
It remains to be seen if this partnership will actually cater to the mass market by offering budget and mid-range smartphones at subsidised prices. It will also be interesting to see if this will popularise carrier-locked models in India, a practice that is highly popular in Google’s home country, the US.
It is worth noting that Google has also partnered with Airtel’s rival, Reliance Jio, for the $4, an ultra low-cost 4G smartphone. This is in addition to Google’s $4 to the tune of $4.5 billion (approx. ₹33,700 crore), apart from $4 for 5G and other networking solutions.
Apart from the consumer side of things, Airtel outlined a few other larger strategic goals of its partnership with Google. One of those is accelerating the adoption of digital solutions by small and medium businesses – Airtel says that it serves over one million of those already, and this partnership will help the company accelerate growth in this area.
Sunil Bharti Mittal, chairman of
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