Facebook recently bought a 9.9% stake in Reliance Jio for $5.7 billion. Jio is the telecommunications arm of Asia’s richest man, Mukesh Ambani’s Reliance Industries Limited (RIL).
The company which launched in 2015 already has about 388 million subscribers. Reliance Jio says the investment is the largest for a minority stake by a technology company worldwide.
It adds that Facebook’s investment is the largest Foreign Direct Investment (FDI) in India’s technology sector.
Facebook in its statement explains:
“This investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country.
“In less than four years, Jio has brought more than 388 million people online, fueling the creation of innovative new enterprises and connecting people in new ways. We are committed to connecting more people in India together with Jio.”
Why Facebook is making such a huge investment
Facebook’s reason for entering the Indian telecoms market is simple. It says it wants to enable new opportunities.
“Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small businesses across India,” the social media giant says.
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Chairman and managing director of RIL, Mukesh Ambani says the partnership is good because it will help post-Corona India to make a quick economic recovery.
“All of us at Reliance are humbled by the opportunity to welcome Facebook as our long-term partner in continuing to grow and transform the digital ecosystem of India for the benefit of all Indians,” he said.
Jio Platforms, Reliance Retail, and Facebook’s messaging service, WhatsApp service have also entered into a commercial partnership agreement.
This will help accelerate Reliance Retail’s new commerce business on the JioMart platform. It involves supporting small businesses using Whatsapp. Reports say WhatsApp is about to launch a payment platform to facilitate this. The platform will rival the likes of Paytm, Google Pay, PhonePe, and Amazon Pay.
“One focus of our collaboration with Jio will be creating new ways for people and businesses to operate more effectively in the growing digital economy.
“For instance, by bringing together JioMart, Jio’s small business initiative, with the power of WhatsApp, we can enable people to connect with businesses, shop, and ultimately purchase products in a seamless mobile experience,” Facebook said.
The investment will also help Jio offset some of its debts resulting from its rapid expansion. The company’s debt currently stands at about $5 billion although the company is now valued at about $65.95 billion.
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