Google stake in Voda-Idea could heat up race for digital ecosystem

A potential investment in Vodafone Idea Ltd by Alphabet Inc.’s Google will further heat up the race to create the next big connected ecosystem in India, said analysts.

Google had in January announced a partnership with Bharti Airtel Ltd to extend its G Suite services to Airtel subscribers. The US internet giant has been working closely with the enterprise team at Airtel for a few years now. However, Google could potentially be hedging its bets with an investment in Vodafone Idea.

Reliance Industries’ Jio Platforms Ltd recently secured more than $10 billion in investments from Facebook and PE firms such as KKR, General Atlantic, Vista Equity Partners and Silver Lake. This has forced other telcos and technology firms to consider their options in India which, other than China, is the fastest-growing digital services market.

“While Google and Bharti Airtel have committed substantial resources in training Airtel’s workforce to sell G Suite to its enterprise customers and while the relationship has been reasonably successful, it has as yet failed to yield exponential returns for both,” said Sanchit Vir Gogia, chief analyst and founder of Greyhound Research.

Some experts also said that given Vodafone Idea’s financial constraints, Google may get a bargain, which is not possible with Airtel.

Vodafone Idea recently launched Cloud Express Connect solution, which extends secure MPLS networks to Microsoft Azure and Google. This and other initiatives, including Internet of Things and enterprise mobility, will allow Google to further exploit the synergies with Vodafone Idea’s 329 million customer base.

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