Alphabet Inc GOOG GOOGL-owned Google will invest up to $1 billion in India’s second largest telecom operator Bharti Airtel, two years after Mark Zuckerberg-led Facebook's — now renamed as Meta Platforms Inc’s FB — mega funding in Reliance Jio Platforms.
What Happened: The deal involves Google investing $700 million to buy a 1.28% stake in Airtel at a price of about $9.9 a share and also pump in up to $300 million toward potential multi-year commercial agreements, Airtel said in a regulatory filing on Friday.
The New Delhi-based Airtel said the deal will help boost its 5G plans across smartphones of all price ranges.
It would also push the cloud ecosystem for businesses across India.
“As a part of its first commercial agreement, Airtel and Google will work together to build on Airtel’s extensive offerings that covers a range of Android-enabled devices to consumers via innovative affordability programs," Airtel said.
The deal, it said, is also aimed at lowering the “barriers of owning a smartphone across a range of price points, in partnership with various device manufacturers.”
Google CEO Sundar Pichai had in 2020 said the company would invest about $10 billion for the India Digitization Fund over the next five to seven years.
Why It Matters: The investment is the latest instance of growing interest in India’s 1.8 billion mobile users from U.S.-based tech giants.
Google and Meta products — Google search, Youtube, Facebook, Instagram, WhatsApp —are immensely popular in India where operators are running 5G trials ahead of the expected commercial deployment this year.
Meta Platforms had in 2020 invested $5.7 billion in Reliance's Jio Platforms, the largest privately-held telecom company owned by billionaire Mukesh Ambani’s listed company Reliance Industries.
Price Action: Alphabet Class A shares closed 0.2% lower at $2,580.10 a share on Thursday.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.