US social media giant, Facebook, has agreed to buy a 9.99 per cent stake in India’s biggest mobile network operator, Reliance Jio, for $5.7 billion (43,574 crore rupees), according to an official company statement.
Reliance Jio exploded onto the scene when it launched in 2016, bringing unprecedented levels of disruption to the Indian telecoms market, with its series of ultra-cheap 4G data tariffs and handsets. The company has been a fundamental catalyst in India’s digital revolution and has accrued over 330 million subscribers in just three years, to become the country’s biggest mobile network operator.
The deal will be seen as a major win for both companies, allowing Reliance Industries to pay down its significant debt pile, while simultaneously offering Facebook vital access to the world’s second largest telecoms market.
"This investment by Facebook values Jio Platforms at Rs4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of Rs70 to a US Dollar). Facebook’s investment will translate into a 9.99% equity stake in Jio Platforms on a fully diluted basis," Reliance Jio’s parent company, Reliance Industries, said in a statement, originally sourced by The Economic Times of India.
India is Facebook’s largest market outside of the US and a potentially lucrative one, especially with Facebook believed to be considering launching a number of pay per play services across its mobile messaging subsidiaries, Whatsapp, Facebook Messenger and Instagram Messenger.
“Facebook is teaming up with Jio Platforms -- we're making a financial investment, and more than that, we're committing to work together on some major projects that will open up commerce opportunities for people across India,” said Facebook CEO, Mark Zuckerberg, in an online post.
“India is home to the largest communities on Facebook and WhatsApp, and a lot of talented entrepreneurs. The country is in the middle of a major digital transformation and organisations like Jio have played a big part in getting hundreds of millions of Indian people and small businesses online.
“This is especially important right now, because small businesses are the core of every economy and they need our support. India has more than 60 million small businesses and millions of people rely on them for jobs. 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. This is something we can help with -- and that's why we're partnering with Jio to help people and businesses in India create new opportunities,” he added.