Is Facebook about to invest $1bn in India’s Reliance Jio?
Reports in the UK press suggest that the potential deal could be cancelled due to the economic impact of the current Covid19 epidemic
US social media giant, Facebook, is reported to be considering purchasing a $1 billion stake in India’s disruptive network operator, Reliance Jio, according to reports in the press.
The Financial Times has reported that Facebook was considering investing $1 billion for a 10 per cent share in Reliance Jio but that the current Coronavirus pandemic may have scuppered the deal.
Reliance Jio has seen meteoric growth, since it launched in 2016, attracting 330 million subscribers with its combination of ultra low cost data tariffs and affordable handsets. Jio has been instrumental in facilitating India’s digitalisation, bringing 4G to the masses.
The brainchild of business magnate Mukesh Ambani, Reliance Jio has now diversified its offering, providing a range of services from fixed line broadband to financial services.
As the world’s second biggest telecoms market after China, India represents an enormous opportunity for Facebook, whose Watsapp messaging service already has over 400 million users on the subcontinent. With a population of 1.2 billion, the Indian market could be a potentially lucrative one for Facebook, especially as it looks to launch a range of paid for services across its messaging platforms.
Despite the wealth of potential in the Indian market, the country’s telecoms operators are currently undergoing some of the toughest market conditions on record, with operators being forced to trade on ultra fine margins.
A recent Supreme Court ruling has also saddled the telecoms industry with tens of billions of dollars of debt, as telcos have been forced to recalibrate the way that the calculate their adjusted growth revenues.