Latest in Gear

Image credit: INDRANIL MUKHERJEE via Getty Images

Facebook buys 9.9 percent of India's biggest mobile network

It is spending $5.7 billion for the stake in Jio Platforms.
115 Shares
Share
Tweet
Share

Sponsored Links

Migrant labourers watch a movie on their mobile phone while resting under a bridge during a government-imposed nationwide lockdown as a preventive measure against the spread of the COVID-19 coronavirus, in Mumbai on April 16, 2020. (Photo by INDRANIL MUKHERJEE / AFP) (Photo by INDRANIL MUKHERJEE/AFP via Getty Images)
INDRANIL MUKHERJEE via Getty Images

Facebook is buying a 9.99 percent stake in Jio Platforms, the Indian telecoms giant owned by India’s richest man, Mukesh Ambani. Jio, a subsidiary of Reliance Industries, has conquered much of the subcontinent’s telecoms market with aggressively low prices and is working on leveraging its platforms for retail. In exchange for $5.7 billion, Facebook will gain a seat on Jio’s board, and will work to integrate Jio’s customers with Facebook’s platforms, including WhatsApp.

In a statement, Facebook CEO Mark Zuckerberg wrote that the company is “committing to work together on some major projects that will open up commerce opportunities for people across India.” That will involve mashing WhatsApp with JioMart, a system that enables local businesses to sell their products online. Given WhatsApp's scale in India, it will theoretically boost economies all across the country.

Jio itself is a subsidiary of Reliance Industries, Mukesh Ambani's conglomerate that has interests in oil, fashion, retail and broadcasting. It began offering 4G service at the end of 2015 and, through a combination of low prices and buying the only company with spectrum licenses across the country, quickly grew. Facebook says that “in less than four years, Jio has brought more than 388 million people online,” and now controls more than half of India’s telecoms market.

It is also, fact fans, the company that first adopted KaiOS, launching the JioPhone, which was given away for free on a number of 4G plans.

But Jio’s dominance -- which Bloomberg describes as being so effective as to turn India's “fragmented telecom market into a duopoly” -- came at a price. The company racked up significant debt, which Livemint says is around ₹40,000 crore (north of $5 billion). That, coupled with the uncertainty around COVID-19, may have been a useful lever to encourage Jio to do business.

And Jio isn't just a mobile operator, but offers fiber to the home, municipal WiFi, as well as a big data, cloud computing and AI division. But the key point of interest for Facebook is both to enable its user count to grow, and to center its platforms as the place for people to communicate and do business. If every bodega, corner store and mom-and-pop shop in India can handle orders through WhatsApp, it elbows-out any competition. 

India has always been one of Facebook’s key targets, given the large population and relative lack of digital infrastructure. As user growth in the US and Europe stagnates, the company has made overtures to China, and India, where Facebook has been pushing hard for traction since 2015. As The Wall Street Journal says, Facebook hasn’t always found it easy in India, where regulators are “hostile to foreign tech firms.” 

Free Basics, for instance, was a Facebook-branded, Facebook-owned way for low-income families to get online. Unfortunately, since Free Basics unsurprisingly prioritized Facebook services over others, it was banned in India for violating the local net neutrality laws. And WhatsApp, which has a reputation for juicing fake news that spills over into real violence in the region, has faced plenty of regulatory ire in the country. More than two years after trialling a payments platform in India, for instance, officials have still refused to allow it to be rolled out nationwide.

In this article: Facebook, Jio, India, news, gear, tomorrow
All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.
Comment
Comments
Share
115 Shares
Share
Tweet
Share

Popular on Engadget

Engadget's 2020 Back-to-School Guide

Engadget's 2020 Back-to-School Guide

View
The Morning After: Google's $350 Pixel 4a is the best midrange phone you can buy

The Morning After: Google's $350 Pixel 4a is the best midrange phone you can buy

View
A $13,000 electric car will go on sale in the US by late 2020

A $13,000 electric car will go on sale in the US by late 2020

View
'Avengers: Endgame' directors will make Netflix's most expensive film yet

'Avengers: Endgame' directors will make Netflix's most expensive film yet

View
China won't accept 'theft' of TikTok, according to state newspaper

China won't accept 'theft' of TikTok, according to state newspaper

View

From around the web

Page 1Page 1ear iconeye iconFill 23text filevr