"...It will invest over Rs 4,000 crore in the Indian state of Punjab over the next 5 years to expand services and contribute to the Government of Punjab's digital inclusion agenda," the company said in a statement.
Airtel signed an agreement with the Punjab government on the sidelines of the Progressive Punjab Investors Summit in Mohali.
As a part of the agreement, the company will lay an additional 10,000 km of optic fibre across Punjab and expand its 4G footprint to cover majority of the state's population over the next few years.
Airtel had launched 4G long-term evolution (LTE) services in Chandigarh in March 2013.
"This will provide a major boost to growth of broadband services in rural areas and enable delivery of services such as e-governance, e-education, e-health and much more," it said.
Airtel will also invest in its existing 2G mobile operations, wire-line and DSL broadband, DTH services and m-commerce services.
"Just like the mobile phone connected millions across Punjab, this high speed data connectivity initiative will further empower people with information and services available at the touch of a screen," Bharti Enterprises Chairman and Group CEO Sunil Bharti Mittal said.
Airtel said it launched mobile services in Punjab in 2002 and is the largest mobile operator in the state with over 7.2 million customers.
The company said till date, it has invested over Rs 4,800 crore on operations in the state with its mobile network reaching 162 towns and 12,750 villages and covering 94 per cent of the population.
The company's distribution network is spread across 50,000 retailers in Punjab and its operations provide direct and indirect employment opportunities to over 65,000 people, it added.