The social networking giant Facebook has announced an investment in Indian telco arm of Reliance Industries Limited, the Jio Platforms Limited. The deal is worth $5.7 billion or around Rs 43,574 crore, valuing the Indian telco at a pre-money valuation of $65.95 billion (around Rs 4.62 lakh crore). This would translate to a 9.99 per cent stake in Reliance Jio.
This would also make Facebook the largest minority shareholder in Reliance Jio Infocomm Limited, a wholly-owned subsidiary of Jio Platforms which is part of India’s most valued corporate Reliance Industries.
“Facebook is teaming up with Jio Platforms – we’re making a financial investment, and more than that, we’re committing to work together on some major projects that will open up commerce opportunities for people across India,” commented Mark Zuckerberg, co-founder and chief executive of Facebook, in a FB post.
In the last three-and-a-half-year Reliance Jio has disrupted the entire digital ecosystem of India. With cheap data plans, the telco has gathered more than 388 million subscribers, thus wearing the crown of top telecom operator in India. The telco has built its world-class eco-system with services like JioTV (live tv streaming), JioSaavn (music streaming), JioPay (payment service), JioFibre broadband, LYF smartphones and smart devices. The best part here is that the telco has been offering these devices, applications, content and services at affordable tariffs as part of Jio Digital Life.
One example of Facebook and Jio collaboration would be JioMart, Jio’s small business initiative, with WhatsApp, which counts India as its biggest market. Here, users can connect with business, shop and ultimately purchase products in a seamless mobile experience. Don’t forget Instagram which has grown dramatically in India in recent years as the place where people follow their interests and passions.
“We are excited about furthering our investment in India’s vibrant digital economy. Our efforts with Jio will be focused on opening new doors and fueling India’s economic growth and the prosperity of its people. We look forward to working with Jio, and to future collaborations in India to advance this vision,” said David Fischer, Chief Revenue Officer, and Ajit Mohan, VP and Managing Director, India.
Facebook investment in Jio is one of the largest investment for a minority stake by a technology company anywhere in the world. It’s also the largest foreign direct investment in the technology sector in India.
The partnership with Reliance Jio would help Facebook to gain the traction it once failed with free internet initiative, Free Basics, in India. Besides one of the biggest advantage, Facebook would get is the closeness with Mukesh Ambani, India’s richest man and close ally to India’s ruling party (whichever party rules India).