Google on Friday announced that it would pump in equity of $700 million in telecom operator Bharti Airtel’s business. The tech giant said an additional $300 million corpus would be invested over a five year period on “mutually agreed commercial initiatives”.
A major component of this investment appears to be getting cheaper handsets in more consumers’ hands. Google said that this funding would scale up a “range of devices to consumers via innovative affordability programs”. Airtel elaborated in its own press release that the companies would work with device manufacturers to bring down “barriers” to owning a smartphone.
This investment comes from the $10 billion Google for India Digitization Fund, announced in 2020. $4.5 billion of that fund was announced to go to Airtel’s main competitor, Jio, days after it was unveiled in July 2020.
Airtel may not end up stocking the phones it tries to get into its subscribers’ hands, however, the company’s India MD and CEO Gopal Vittal foreshadowed the Google investment last August. “We’re working with both OEM manufacturers, with Google, as well as with software developers to see how we play this game in the smartest way without taking inventory positions, without manufacturing our own device while still playing with the ecosystem at large,” Vittal had said.
Enticing less wealthy customers to buy smartphones with financing plans is not a new idea; the JioPhone is the most significant example of a telco aggressively investing in the handset ecosystem to improve revenues from mobile data. Vittal’s earlier remarks seem to suggest that unlike Jio, Airtel wants to enter this space without having to own the burden of purchasing the devices before selling them to customers.
Even e-commerce major Flipkart gave the idea a whirl — a year ago, Flipkart Smartpack was announced last year as a bid to get customers to pay for bundled OTT platforms, with a promise that they would in twelve months be eligible for a refund upon returning the phone to customers.
