Google has been in ‘advanced stages of negotiations’ with Airtel for ‘nearly one year’ now and a ‘substantially large’ deal is potentially happening, TOI sources have said.
Top executives from both companies have been collectively working out the finer aspects of this partnership. Both companies’ internal and external legal teams, as well as their M&A teams are involved.
Neither Google nor Airtel have responded to queries.
If the deal got through, it could be a sigh of relief for Sunil Mittal, with Airtel struggling to keep its head above water.
Airtel’s plight is largely due to Ambani‘s revamp of the industry with free voice and dirt cheap data rates. The resultant pressure forced Vodafone and to merge.
Airtel’s board is set to meet on Sunday and plan fundraising options. The meeting takes place in light of Airtel’s current debt clocking in at nearly Rs 1.6 lakh crore at the end of June. The telco has been unable to raise tariffs freely, forcing it to explore other options.
“Google’s entry could turn Airtel’s balance sheet around, as well as providing strategic assistance with its expertise on data analytics,” an analyst told TOI.
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.
“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.
With inputs from TOI.
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