It was an important day for India’s Telecom Sector with the US based social media technology giant Facebook buying 9.99% stake in Reliance’s Jio Platforms for $5.7 billion moments. It’s one of the biggest deal in India’s digital space and will make Facebook as biggest minority stakeholder in Jio. The country is in the middle of “major digital transformation” and Facebook is committed to “opening commerce opportunities for people across the country”, founder Mark Zuckerberg said this morning. The deal values Reliance Jio platform at whopping $65.95 billion enterprise value much higher than analyst prediction of $49 billion. It’s now among the top 5 listed companies in India by market capitalisation, with just three and a half years of launch of commercial service.
It’s a win-win situation for both the partners, as this deal will help Reliance to reduce it’s debt and achieve its goal of debt free company by early next year. Also Jio will leverage reach of Whatsapp and Facebook’s chat service to promote its commerce activities under Reliance Retail. On the other hand, Facebook will leverage Reliance Jio’s subscriber base of 388 million to expand its footprint in India’s digital space and will help launch and expand its services like financial payment, and upcoming short video sharing app Lasso.
Concurrent with the investment, Jio Platforms, Reliance Retail and Facebook’s WhatsApp have also entered a commercial partnership agreement to further accelerate Reliance Retail’s new commerce business on the JioMart platform using WhatsApp and to support small businesses on WhatsApp, RIL said.
In his message RIL chairman Mr Mukesh Ambani stressed on the benefits of the Facebook-Jio tie-up for the nearly three crore kirana stores around the country that will now be “empowered and can create new employment opportunities with digital technology”.
While Mark Zucerberg said ‘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.”