Facebook has bought a 9.9 per cent stake for Rs 43,574 billion (USD 5.7 billion) in Reliance Industries' telecom business, Reliance Jio.
The deal gives Facebook a foothold in the fast-growing market and helps the Reliance significantly cut debt. The deal values Jio at Rs 4.62 lakh crore ($65.95 billion).
Reliance had made Jio publicly available in September 2016. Since then it has acquired 380 million customers after offering innovative data and calling plans.
One focus of Facebook's collaboration with Jio will be bringing together JioMart, Jio’s small business initiative, with WhatsApp.
This deal will be an important lever for Facebook to build a stronger presence in India, four years after its attempts to build a free internet offering, Free Basics, was banned by the country's telecom regulator. Allying with Reliance Jio, owned by billionaire Mukesh Ambani and his family, will give Facebook not only a better reach into India's hinterland, but also better access to a stronger business lobby to promote its future endeavours.
In a statement, David Fischer, chief revenue officer, Facebook and Ajit Mohan, VP and managing director, Facebook India, said, "This investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country. In less than four years, Jio has brought more than 388 million people online, fueling the creation of innovative new enterprises and connecting people in new ways. We are committed to connecting more people in India together with Jio."
They added, "India is in the midst of one of the most dynamic social and economic transformations the world has ever seen, driven by the rapid adoption of digital technologies. In just the past five years, more than 560 million people in India have gained access to the internet. Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small businesses across India. They account for the majority of jobs in the country, and form the heart and soul of rural and urban communities alike. In the face of the coronavirus, it is important that we both combat this global pandemic now, and lay the groundwork to help people and businesses in the years to come."
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