Bangkok 30 dollars for a smartphone – from the point of view of Google boss Sundar Pichai, this is the ideal price to sell Android cell phones in the important growth market of India to hundreds of millions of people who have not been able to afford the devices so far.
So far, he hasn’t been able to implement the vision he expressed five years ago of ultra-cheap emerging-market smartphones. With a further billion-euro investment in the second largest Internet market in the world, the US group is now making a new attempt.
Google is once again relying on the Indian mobile communications industry as a partner: After a 4.5 billion dollar investment in India’s largest mobile network operator Jio a year and a half ago, the Californian company is now also involved in the second largest telecommunications provider Bharti Airtel: As part of the partnership, which The two companies announced on Friday that Google is acquiring 1.3 percent of Airtel’s shares for $700 million. In addition, Google promised up to 300 million dollars for the implementation of commercial cooperation in the coming years.
It is initially about expanding offers for inexpensive Android devices, it said in a statement. The investment is part of Google’s efforts in India to “improve access to smartphones and increase connectivity,” said CEO Pichai.
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The company wants to “create new and innovative business models” with the partnership to support the ecosystem around the Android device manufacturers in the country in its growth, added Google’s India boss Sanjay Gupta in a blog post.
Google plans to invest $10 billion in India
Google’s calculus behind the strategy is obvious: currently only around half of the nearly 1.4 billion Indians use the Internet. Most of them are online with smartphones – and more than 95 percent of them have Google’s Android operating system installed on their devices.
Should the company succeed in bringing India’s other half online as well, this would mean hundreds of millions of additional users. Nowhere else in the world does the group have such an opportunity. Because in China, the only country with more Internet users than India, Google is not active.
The investment in Airtel is part of a $10 billion investment package that Google plans to use to drive India’s digital transformation. In the past year alone, the company invested in six Indian start-ups – including e-commerce services, a health service and a neobanking provider.
At the same time, the company has been driving the development of comparatively cheap emerging market smartphones in recent months: In November, Google launched an Android device tailored for India called JioPhone with its previous mobile phone partner Jio, which belongs to the Reliance conglomerate of India’s richest man Mukesh Ambani Next to the market.
“The JioPhone Next is an affordable smartphone that was created with the belief that everyone in India should benefit from the possibilities of the internet,” Pichai said of the device launch.
opposition from the competition authorities
But the price of the Google Jio cell phone at around 90 dollars is still three times the limit set by Pichai himself, which would be decisive for a breakthrough in the previously underserved sections of the population. Market researchers assume that several million units of the device have already been sold.
So far, however, it has not been enough to persuade the several hundred million Indian mobile phone owners who do not yet have a smartphone to buy one. In the future, the company wants to work on further lowering the hurdles for becoming a smartphone owner, the company said on the occasion of the new partnership with Airtel.
The Indian authorities still have to agree to the implementation of the agreement. In view of Google’s dominant position in the market, this might not be unproblematic: Last year, Indian competition protection agencies accused Google of exploiting its dominant position with the Android operating system and using its enormous financial power to harm competitors.
Google denied the allegations and said it had actually strengthened competition in India. India’s competition watchdog is also currently investigating allegations against Google News and Google’s Play Store, where the company sells smartphone apps. Google announced that it would cooperate with the investigation.
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