Facebook, the world’s largest social media company by market capitalisation and user numbers is spending billions of dollars in India’s largest mobile operator which is owned by Asia’s richest man.
The deal which was announced Wednesday would see Facebook spending $5.7 Billion for a 9.99% stake in Jio Platforms, the digital technology arm of Indian billionaire Mukesh Ambani’s sprawling conglomerate Reliance Industries.
Jio Platforms has several services under its umbrella, including Reliance Jio, the mobile network that has taken India by storm since launching less than four years ago, racking up 388 million users, putting his brother and rival out of business and forcing other local operators to merge. Apps where users can stream movies, shop online and read news also fall under Jio Platforms.
The tie-up includes a commercial partnership with WhatsApp that potentially paves the way for Facebook to make money from the messaging service’s 340 million users in India.
The partnership comes at a key time for tech in India. The market is growing, but it’s getting tougher for global firms to profit because of shifting regulations, making it all the more important for companies like Facebook to forge key alliances if they want to cash in. It is also a huge investment at a time when the global economy is teetering on the edge.
This Facebook investment values Jio at $66 Billion according to Reliance.