Via Nikkei Asia, a report on Google’s efforts to push mobile connectivity in India:

Internet search group Google has invested $1 billion for a 1.28% stake in Indian telecom operator Bharti Airtel by dipping into its $10-billion India Digitization Fund, a move that underscores the company’s urgency to make smartphone and internet usage ubiquitous in the country amid increasing regulatory scrutiny.

With the investment in Airtel, Google has now bought into India’s two biggest telecom operators — after buying 7.7% of Reliance Industries’ Jio Platforms for 337.3 billion rupees in 2020 — which together control 67% of India’s cellular market.

Of the $1 billion commitment to Airtel, Google will spend $700 million to buy the telecom company’s shares while the rest will be funnelled into implementing multi-year commercial agreements to “scale Airtel’s offerings and accelerate access and digital inclusion across India’s digital ecosystem.”

“Our commercial and equity investment in Airtel is a continuation of our Google for India Digitization Fund’s efforts to increase access to smartphones, enhance connectivity to support new business models and help companies in their digital transformation journey,” Sundar Pichai, chief executive officer at Google and its parent company Alphabet, said in a statement.

Google’s investment in Reliance Jio also birthed an $87-dollar smartphone that is expected to help the companies capture the imagination of millions of Indians who are likely to shun their feature phones over the next few years, and use mobile internet for the first time, drawn by cheap data costs. Entry-level smartphones represent a competitive sector in India, dominated by Chinese smartphone makers such as Xiaomi, Oppo and Vivo.

Data in India is among the cheapest in the world, where the likes of Reliance Industries, Airtel and Vodafone are locked in an intense battle to gain new users. While the price war has somewhat eased of late after steep tariff cuts bled the telecom operators, India’s telecom regulator noted in a report in August 2021 that the average user consumes 12.3 gigabytes of data per month at 10.7 rupees per gigabyte.

Low prices, coupled with accrued license fees and other dues to the government, have led to increased debt among Indian telecom operators. Earlier this month, Vodafone-Idea, which trails Airtel and Jio, decided to trade the interest it owes the government with 35.8% stake in the company.

Airtel, which raised 210 billion rupees through a rights issue in August last year, chose to pay interest on its debt. Airtel owes the government about 995 billion rupees, while Vodafone owes 1.6 trillion rupees.