Facebook buys Sh611b stake in Indian mobile network Jio in key deal
INVESTMENT: Facebook has said it is investing $5.7 billion (Sh611.3b) in cut-price Indian mobile internet company Reliance Jio, which is owned by the country’s richest person Mukesh Ambani.
The deal makes the social network the largest minority shareholder in the telecoms unit of Reliance Industries, with a 9.99 per cent stake.
It gives Facebook a major foothold in India, where its WhatsApp chat service has 400 million users and is about to launch a payments service.
“This investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country,” Facebook said in a statement.
Facebook also said it plans to focus on the collaboration between WhatsApp and Reliance’s e-commerce venture JioMart to enable people to connect with businesses, shops and purchase products.
In February this year WhatsApp Pay was granted permission by Indian authorities to start a phased roll-out, two years after the start of a trial version of the service.
In a separate statement Reliance Jio said the agreement will be good for both the company and the country as a whole: “This partnership will accelerate India’s all-round development, fulfilling the needs of Indian people and the Indian economy.”
Reliance Jio is the most valued subsidiary of Reliance Industries, the oil-to-telecoms conglomerate.
The company has been able to upend India’s telecoms market in this short span by offering very low data prices, which has allowed it to keep competition at bay.
With a presence across a suite of services such as mobile telephony, live TV, music streaming and payments, Facebook will be looking to drive synergies across services and further consolidate its position in India.
This deal also comes in at a particularly opportune time for Ambani, who has been making a concerted effort to reduce the debt on his books. – BBC