Blocked In China, Facebook Invests Huge Amount In India With Reliance Jio

In a statement released on April 22, Facebook reached a $5.7 billion investment deal to own 9.9% of India's Reliance Jio Infocomm Limited.

This is one of Facebook's biggest investments, proving its commitment to the billion-dollar country market. At the same time, it is a sign that technology giants have begun to operate again after the pandemic.

Jio Platforms is a subsidiary of Reliance Industries, one of India's largest multinational businesses and a major provider of mobile and Internet services in the country.

Jio has the ambition to encroach on the fields of e-commerce, data center building, fiber-optic Internet development, health services, and online education distribution with innovations in information technology.

Mark Zuckerberg, CEO of Facebook, wrote on his personal page,

“The country is in the middle of a major digital transformation, and organizations like Jio have played a big part in getting hundreds of millions of Indian people and small businesses online.”

Companies like Jio play a significant role in helping hundreds of millions of people and sectors in approaching the Internet.

Potentials of the 1.3-billion-people market

Facebook said the move showed their commitment to the Indian market, especially when Jio owns a number of Internet service users that is up to 388 million people.

WhatsApp has spent years developing management tools and payment systems for small businesses. Facebook is also building an online store for users to make transactions on the platform.

“By bringing together JioMart, Jio’s small-business initiative, with WhatsApp, we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience,” said David Fischer, Chief Revenue Officer and Ajit Mohan, managing director in India of Facebook.

About 400 million users are using WhatsApp and millions of small businesses opt for this app to communicate in India. Mohan raised the question while also giving the answer,

"How do we help them access customers and help people discover products?”

The business that brings benefits to bilateral parties

This is not the first time Facebook approached the Indian market. A few years ago, Facebook wanted to provide free Internet with the Free Basic program.

However, the project was forced to stop in 2016 because managers were worried about unfair competition among suppliers.

Recently, Facebook continued to have problems with India when the national government asked WhatsApp to encrypt some parts of user information and WhatsApp refused to cooperate. By contrast, regulators allegedly delayed licensing WhatsApp’s implementing an online payment service.

Jio was founded in 2016 by Mukesh Ambani, the top Indian wealthy tycoon who is now the richest man of Asia. The company offers free calls and superfast 4G data.

Since then, Jio has become India's largest network with about 400 million subscribers. The development of Jio helps reduce the cost of mobile Internet in India to the lowest level in the world, with almost unlimited data and call rates that cost only a few dollars a month.

However, Mr. Ambani has to incur huge debt to build Jio into an empire today. Those costs are a burden for other Reliance Industries' companies. The profits from Facebook is expected to help Reliance reduce part of its debt and enable it to reinvest in other long-term projects.

Mr. Ambani is known to have a strong position in building the development path of Indian regulators.

He expressed his support for local companies and suggested imposing regulations on foreign companies such as Facebook and Amazon. He once shared the view that Indian user data must be collected and controlled by Indians.

Jio's Chief Strategy Officer, Anshuman Thakur said that companies have different views on a number of issues, but that doesn't prevent them from working together in other areas.

Facebook's investment deal could turn the Indian telecom market into a two-horse race between Jio and Airtel while Vodafone Idea is on the verge of bankruptcy with the decision to collect billions of dollars of tax money from the Supreme Court of India.