Bharti Airtel, India’s second-largest telecom operator, has clarified that it is not developing any exclusive smartphone in partnership with Google and will rather work with different players across the ecosystem to provide smartphone access to its users in the country.
“…there is no exclusivity. We prefer to work across the ecosystem. When it comes to software, we will use existing Android capabilities. But at the same time, we are not developing any exclusive device or anything like that which requires a different kind of capability set,” Gopal Vittal, CEO of Bharti Airtel said in an investor call following its partnership with internet major Google.
“And we would much rather work across every player, whether it’s device manufacturer or e-commerce player to provide smartphone access.”
Google will invest $700 million to acquire a 1.28% stake in Airtel and will invest $300 million towards implementing commercial agreements, which will include investments in scaling the telecom operator’s offerings that cover a range of devices to consumers via innovative affordability programs as well as other offerings aimed at accelerating access and digital inclusion across India’s digital ecosystem.
Vittal said that Airtel has done pilots with lending partners to bring down the unit price of smartphones and has now developed the software capability to ensure that it monitors the EMI paid out for those devices.
“There’s a third capability where we work with one of the device players to provide a targeted incentive for an upgrade based on our intelligence of which customer is likely to upgrade. So these are between 500 Rs 1000 and that again, has seen very significant traction,” Vittal revealed.
Terming the telecom market extremely “competitive”, Vittal said that Airtel would continue to focus on driving faster smartphone adoption. “…that goal remains unchanged. We’ve done well over the last two years to actually drive almost 80 million users from feature phones to smartphones,” he said, adding that the telco has seen a significant jump in the ARPU of those customers who shifted to smartphones.
Google separately said that it plans to create new and innovative business models to help grow the Android OEM ecosystem in India through the Airtel investment.
“In the last two years, we have made steady progress on the goals we set to achieve with the Google for India Digitization fund, from building an India-focused Android experience for the country’s new internet users to partnering with companies that are deeply vested in bringing the richness of the internet to people through localized content experiences,” Google said in a blog post.
Market watchers believe that both companies will work with handset makers to bring smartphones bundled with new services and customized software to attract users to its 4G data network and push the feature phone to smartphone migration.
As per market reports, Reliance Jio, Airtel and Vodafone Idea are finding it difficult to convert the next 100-150 million subscribers into their respective 4G networks. These telcos are now looking at various partnerships to lower the cost barrier besides making the offering lucrative. During the call, Vittal also said that the Sunil Mittal-led telecom operator was putting in $2.5 billion towards CAPEX every year.
“We will continue to actually allocate capital towards several areas, whether it’s home broadband, data centres, our 5G networks. This will fire up our digital agenda dramatically. And that’s where we will double down,” he added.