Bharti Airtel shareholders have cleared the issue of equity shares by the company to Google on “a preferential basis” following the US-based tech giant’s recent purchase of a 1.28% stake in the telco for $700 million. They have also backed the telco’s plans to spend a whopping Rs 1.17 lakh-crore in related-party expenses, including opex, via joint venture, Indus Towers, and subsidiaries – Nxtra Data and Bharti Hexacom – over the next four years.
“The resolutions (as part of special businesses) were approved with a 99.99% overwhelming majority at Airtel’s extraordinary general meeting (EGM) on February 26,” the Sunil Mittal-led telco said in an exchange filing.
Last month, Google had announced an investment of up to $1 billion in Bharti Airtel. Of this, $700 million would be for a 1.28% stake, while the balance $300 million would be pumped in over five years as part of commercial pacts to make smartphones more affordable to drive 4G upgrades and also jointly develop network domain 5G use cases. Google’s invest $700 million (Rs 5,224.4 crore) investment into Airtel for the 1.28% stake will come from its $10 billion ‘Google for India Digitization Fund’.
A senior Airtel executive also said that the telco’s Rs 1.17 lakh-crore material related-party expenses, including opex spends over the next four years, would include Rs 88,000 crore in business with tower JV, Indus, Rs 15,000 crore for availing the services of data-centre arm, Nxtra and related-party transactions of up to Rs 14,000 crore with Bharti Hexacom. Airtel owns 70% in Bharti Hexacom, which runs mobile services in Rajasthan and parts of the Northeast.
Airtel is the second telco after market leader, Reliance Jio, to receive funding from Google. The US search services leader needs more and more people on the internet, which India with 1.3 billion people offers, while telcos like Airtel and Jio need more customers to use smartphones to drive up data consumption and revenue, say analysts.
Google’s investment is also expected to boost Airtel’s war chest as India’s second-largest carrier readies to participate in the upcoming 5G airwaves sale likely around May-June, and subsequent network rollouts, they added.
On Friday, Airtel had also said it had agreed to buy a 4.7% stake in Indus from Vodafone Group Plc in cash, which will boost its holding in the tower company to 46.43%.
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