Facebook Invests $5.7 Billion in India Internet Giant Jio

SAN FRANCISCO — Facebook on Tuesday made its largest single investment by putting $5.7 billion into Jio Platforms of India, an enormous bet on the developing market and a sign of how large tech companies are forging ahead in the pandemic.

Jio Platforms is a subsidiary of Reliance Industries, one of India’s biggest multinational companies and a major provider of cellular and internet services in the country. The investment gives Facebook a 9.99 percent stake in Jio Platforms, Jio said.

Facebook said the move indicated its commitment to India. More than 388 million people in India have been connected to the internet over the past four years through Jio, Facebook said.

“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,” Mark Zuckerberg, Facebook’s chief executive, said in a post to his Facebook page announcing the deal. “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.”

Facebook has historically not made as much money from each user in Asia as it does elsewhere. But the company hinted that the new partnership could change that. WhatsApp has worked for years to build tools for small businesses and has dabbled in payment systems, while Facebook has also invested in creating digital storefronts for entrepreneurs to sell goods and services online.

Jio was founded by Mukesh Ambani, an industrialist who is India’s richest man. It transformed India’s technology scene when it hit the market in 2016 by offering free calls and ultracheap 4G data to Indians who were previously stuck with high prices and slower 3G connections from the existing carriers.

Since then, Jio has become India’s largest carrier by number of subscribers, with nearly 400 million lines. It has helped drive India’s mobile internet costs to the lowest in the world, with virtually unlimited data and calls costing just a few dollars a month. The price war it began has also hobbled India’s telecom companies, driving many out of business.

Jio has ambitions to take on Amazon in e-commerce, run data centers, provide fiber internet to homes and businesses and set up new services like tele-health and distance learning.

But Mr. Ambani incurred enormous debt to build the telecom business. Those costs have been subsidized by other parts of Reliance Industries, which is also India’s largest retailer, its biggest producer of polyester and one of its biggest energy companies.

Mr. Ambani has also been the most powerful corporate voice urging regulators to take an India-first approach that favors local companies and hobbles foreign firms like Facebook and Amazon. He has argued that the vast amounts of data collected by such firms should stay in India and be used to build up Indian companies.

Facebook’s investment may help turn India’s battered telecom sector into a duopoly. After a recent Supreme Court decision ordered older carriers to pay billions of dollars in back taxes, one of the three major carriers, Vodafone Idea, was already teetering on the edge of insolvency.

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