Google has announced it’s investing nearly half of its new $10 billion India Digitization Fund ($4.5 billion) in the country’s largest telecom operator, Reliance Jio — with which it’s also jointly developing an “entry-level affordable smartphone”.
The move strategically makes sense for Google that’s searching for its next billion users. Reliance Jio’s 4G-only network dominates more than a quarter of India’s mobile subscribers and today, at its annual shareholder virtual conference, the telco even announced it’s building a 5G infrastructure.
By the end of this year, the number of internet users in India is projected to cross 600 million and a McKinsey Global Institute report further estimates the current 500 million figure will double in the next couple of years as both hardware and internet costs continue to fall.
With an affordable smartphone, Google and Jio are looking to capitalize on this surge. Plus, both of these companies offer a suite of internet services like Google’s search engine and Jio’s over-the-top internet television platform that will greatly benefit from the country’s growing data consumption habits.
Google didn’t share much on this upcoming smartphone. The company’s India head, Sanjay Gupta, and VP of product management, Sameer Samat wrote in a blog post that the phone will feature “optimizations to the Android operating system and the Play Store.” Further, Mukesh Ambani, the world’s sixth-richest person and the chairman of Jio’s parent conglomerate, Reliance confirmed that the phone will support 4G as well as 5G connectivity whenever it rolls out.
It’s unclear at the moment what role Google will play in this partnership. It already offers an optimized version of Android called Android Go for budget smartphones. In addition, it’s worth noting this isn’t Google’s first investment towards capturing India’s digital shift. Two years ago, Google invested $22 million into KaiOS, a smarter operating system for non-touchscreen feature phones. It’s worth noting that Reliance Jio sells the most popular KaiOS-powered dumbphone in India.
Like several other US-based tech companies, Google has also actively fine-tuned its services to cater to the Indian audience. For instance, in India, you can talk to the Google Assistant through a toll-free number in Hindi or English — no internet needed.
“Together we are excited to rethink, from the ground up, how millions of users in India can become owners of smartphones. This effort will unlock new opportunities, further power the vibrant ecosystem of applications, and push innovation to drive growth for the new Indian economy,” Google added in the blog post.
Google isn’t the only one collaborating with Reliance Jio. Over the past few weeks, a range of companies including Facebook, Intel, and Qualcomm have invested in Jio to expand their reach and capture this wave of new users, most of whom are logging in for the first time.