MUMBAI: Social media giant Facebook is reportedly looking at picking up a 10% stake in Reliance Jio Mukesh Ambani’s Reliance Jio in a deal that would be worth ‘multi-billion’ dollars, reports Financial Times.
According to the report, the ever-widening repercussions of the coronavirus pandemic could alter the schedule of negotiations. It is speculated that Facebook’s interest in Jio has been piqued after its own free internet initiative ‘Free Basics’ failed to take off in India.
Jio is the only company that can possibly take on US tech giants. Reliance poured in huge sums of money to expand Jio and make it the biggest telecom player in the country. This, however, increased the debt burden on the conglomerate and this deal could help the company to achieve its goal of cutting net debt to zero by March 2021 (a target that looks increasingly unfeasible in the current to near term economic scenario).
Facebook, which owns WhatsApp and Instagram, will get a significant footing in the Indian telecom market if this deal goes through. It will be crucial for Facebook as it has more users in India than any other single country.
The number of internet users in India is expected to rise to about 850 million in 2022, up from 450m in 2017, according to a PwC.
According to FT, Google was also involved in talks with Jio for the purchase of stake. These developments have come to light after Microsoft recently announced plans to partner Jio to offer cloud computing.
