In January 2022, Google announced that it would acquire 1.28% stake in Airtel for $700 Mn
Along with the investment agreement, both the companies, through their affiliates, have also entered into certain commercial deals, CCI said
This is Google’s second investment in an Indian telecom company. It had picked up 7.73% stake in Reliance Jio in 2020 for $4.5 Bn
The Competition Commission of India (CCI) on Thursday (June 30) approved the proposed acquisition of a 1.28% stake in telecom major Bharti Airtel by Google.
“The acquirer (Google) and target (Airtel) have executed an investment agreement (IA) per which the acquirer proposes to acquire a minority and non-controlling stake of 1.28% of equity share capital in the target…The commission approved the proposed combination on the basis of modifications offered by the acquirer,” the CCI said in a release.
Along with the investment agreement, both the companies, through their affiliates, have also entered into certain commercial deals. The parties also intend to enter into certain other commercial arrangements in future, it added.
The nod comes nearly five months after it was announced that Google will pick up a 1.28% stake in Airtel for a $700 Mn.The investment came as part of the larger Google For India Digitisation Fund, which was announced in July 2020 by its chief executive officer (CEO) Sundar Pichai.
The tech giant had also said then that it would invest an additional $300 Mn towards potential multi-year commercial agreements with Airtel.
The search giant will make the investment via a holding company called Google International LLC, which is a wholly-owned subsidiary of Delaware-based Alphabet Inc.
This marks Google’s second investment in an Indian telecom company. Earlier in 2020, Google had picked up a 7.73% stake in Jio for $4.5 Bn.
As part of the deal, both Airtel and Google will work together to ramp up the telco’s enterprise cloud solutions, which it currently operates with Amazon. The deal will largely be focused on enabling both parties to work together to build on a range of affordable Android devices in partnership with other device manufacturers.
As 5G auctions loom closer, the partnership will also enable the two sides to develop India-specific 5G use cases and to develop multiple network solutions.
The CCI nod comes at a time when Airtel is locked in a battle with Reliance Jio to gain market share in the country’s telecom market. As per the latest data released by the Telecom Regulatory Authority of India (TRAI) for April, Jio held 35.5% share in the wireless telecom market in the country. Airtel was at the second spot with a market share of 31.61%.
Airtel’s average revenue per user (ARPU) rose to INR 178 in January-March quarter of 2022, driven largely by higher tariffs, strong user additions and one-time gains. The telco reported a 164% year-on-year (YoY) increase in consolidated net profit to INR 2,008 Cr.
Airtel is now preparing for the launch of its 5G services in the country. Earlier in June, the Union Cabinet gave its nod for the auction of 72 GHz of 5G spectrum that will be conducted in July 2022.
