Facebook Eyes Multibillion-Dollar Stake in Reliance Jio
By Anjli Raval, Tim Bradshaw and Benjamin Parkin, Financial Times
March 24, 2020
Facebook is seeking to buy a multibillion-dollar stake in Reliance Jio, whose cut-price mobile internet service has attracted 370m Indians in just three years, according to two people with knowledge of the discussions.
Facebook was close to signing a preliminary deal for a 10 per cent share in the heavily indebted Jio, one person close to the negotiations said, although the timetable of a deal has been affected by the global lockdowns caused by the coronavirus outbreak.
If it proceeds, the deal would give Facebook a key foothold in the Indian market, where its WhatsApp chat service has 400m users and is about to launch a payments service.
Since launching Jio in 2016, Mukesh Ambani’s Reliance has emerged as the only Indian company capable of competing with US tech groups in the fast-growing Indian market, expanding from mobile telecoms into everything from home broadband to ecommerce.
Analysts at Bernstein valued Jio at more than $60bn.
Google had also been engaged in separate talks with Reliance Jio, one of the people briefed on the discussions said. The talks come after Microsoft last year announced plans to partner with Jio to offer cloud computing to businesses.
India has emerged as a vital market for Facebook and its WhatsApp messaging platform. The number of internet users in India is expected to rise to about 850m in 2022, according to consultancy PwC, up from 450m in 2017. Facebook overall is now estimated to have more users in India than any other single country.
Meanwhile, the country overtook the US last year to become the world’s second-largest smartphone market after China by unit shipments, according to Counterpoint Research, making it a high priority for Silicon Valley companies as well as their rivals in China.