Google can make a huge investment in Airtel after Jio

After making large investments in Jio, Google is now planning to invest money in Airtel. The companies have reportedly reached an advanced stage of discussion. It is believed that Google will make “substantial investments, running into several thousands of crores of rupees”. The companies have been in talks for the past year.

As per a Times of India report, Google is on its way to make investments worth thousands of crores in Airtel. It is reported that Google is in an “advanced stage of negotiations” with Airtel for the “past nearly one year”, and the deal size could be “substantially large”. Google and Airtel have not made any formal announcements related to the supposed deal but top sources who are aware of the developments have told TOI.

Senior executives from both companies are busy giving a final shape to the deal. Also, their internal and external legal and mergers and acquisitions teams are in the process of chalking out the nitty-gritty details of the agreement. Further, Google was reticent on whether its deal with Jio puts any restrictions on the tech behemoth from making a partnership with a rival.

It remains to be seen what are the underlying dynamics because the Jio and Google partnership might have come with a restriction for the latter to invest in any of its rival companies, including Airtel or Vodafone Idea.

Google’s data monetisation methods could help Airtel earn more money and work on its profitability. The analyst also added that Google must have ‘very strong reasons’ to enter Airtel which poses ‘strong risks’ for anyone.

“The entry of Google adds strength to the balance sheet of Airtel. Also, it helps the company strategically as Google brings in innovation capabilities and strength on data analytics. Google’s data monetisation is far superior to any other company in the world, and it can help Airtel monetize its data much better to improve its realisations and profitability,” a top analyst told TOI about the Google-Airtel deal.

“If anything goes wrong tomorrow, your (Google’s) credibility in the market goes out even though it will be a limited liability. To save its name, the company will have to settle its dues in case Airtel is not able to move ahead due to financial pressures and starts slipping down,” the analyst added.

Notably, Airtel had a debt of nearly Rs 1.6 lakh crore in June. So if the deal between Google and Airtel materialises, it would be a huge breather for Sunil Mittal-led telecom company.

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