Facebook invests $5.7bn in Indian telecom giant Jio Platforms
PALO ALTO, U.S. — Facebook announced on Tuesday it has invested $5.7 billion to take a 9.99% stake in Jio Platforms, the telecom operator owned by Indian conglomerate Reliance Industries.
The deal makes the U.S. social media giant the largest minority shareholder in telecom provider Jio, which is less than 4 years old but already has more than 388 million users, Facebook said in a press release.
The move is aimed at strengthening the U.S. company’s foothold in India, a vital market for Facebook and its messaging app WhatsApp. The country has become a heated battleground for global tech giants thanks to its large population and ever-growing internet users.
“India is a special country for us,” Facebook said in the release, adding, “This investment underscores our commitment to India.”
Reliance Industries, meanwhile, has spent billions of dollars disrupting India’s telecommunications market with its wireless venture Jio in the past few years. The conglomerate’s chairman Mukesh Ambani is gearing up to turn the energy giant to a new digital services company that includes news, music, movies, and app services.
The deal was announced after Ambani said in February that Reliance will pump $15 billion into Jio in hopes of turning it debt-free by March, the Nikkei Asian Review previously reported.
The capital injection from Facebook will help Reliance to lighten Jio’s debt load and accelerate the conglomerate’s digital transformation.
“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,” Facebook said in the announcement.
One example of such collaboration, the company said, is using Facebook’s highly popular messaging app WhatsApp to connect people with businesses and encourage them to shop through JioMart, Jio’s small business initiative. WhatsApp currently has more than 400 million users in India.
“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,” Facebook CEO Mark Zuckerberg said in a blog post.
The tie-up comes at a time when India is under a nationwide lockdown to curb the spread of the virus.
In a time like this, Zuckerberg said, the more than 60 million small businesses and millions of people who rely on them for jobs in India “need our support.”
“With communities around the world in lockdown, many of these entrepreneurs need digital tools they can rely on to find and communicate with customers and grow their businesses,” he added.
