Facebook to expand its footprint in India with a multibillion-dollar stake in Reliance Jio
Social media platform Facebook and India’s largest mobile network company, Reliance Jio are in talks for a multi-billion-dollar partnership that will let Facebook expand its footprint in India.
The news comes as The Financial Times reported citing two sources who are in the know-how of things. The report mentions that both the companies were just about to sign a preliminary deal that would have given Facebook a 10% share in Jio. Still, due to restrictions put in place by the government to contain the coronavirus outbreak, the deal is expected to continue after lockdowns are eased a bit.
With over 370 million subscribers, Reliance Jio is roughly valued at more than 60 billion dollars, and the deal would further allow Facebook to advance its Whatsapp services in the country, such as the much-awaited Whatsapp payment service.
Facebook and Reliance Jio in partnership
Reliance Jio rolled out commercially back in 2016 but since has expanded into the home broadband space with Jio Fiber along with other retail verticles. Recently, Microsoft also announced plans to partner with Jio for its cloud computing business.
However, due to the rising debts, Reliance now aims to cut net debt to zero by March 2021. To that effect, the company is looking to sell off stakes to potential partners where Facebook is likely to have a 10% stake in the company when the deal goes through.
For Facebook, the company hasn’t always had the best experience of dealing with the government and telecom operators here, case in point it’s Free Basics app that was pulled down from networks. To recap, the Free Basics app aimed to provide free internet access to people with essential services like Wikipedia and social apps.
Facebook is also expected to have its largest user base in India than any other country with more than 400 million Whatsapp users. This deal would help the company expand its services in India, gaining more users, launching payments services, among others. The internet user base in India is also forecasted to grow to 850 million by the end of 2022.