Google buys $4.5 billion stake in India's biggest mobile network

It's the fourth big tech investment in Jio in recent months.

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A cyclist passes by an advertising board of Reliance Jio, a digital platform owned by Indian businessman Mukesh Ambani's Reliance Industries, in Mumbai on June 19, 2020. - Ambani said on June 19 that his Reliance conglomerate is net debt free after raising more than $22 billion in a rights issue and selling stakes in its e-commerce unit to Facebook, Saudi Arabia's wealth fund and others. Asia's richest man after upending the Indian telecoms market, Ambani is attempting to do the same in e-commerce with Jio Platforms, taking on US giants Amazon and Walmart in the vast market of 1.3 billion consumers. (Photo by Punit PARANJPE / AFP) (Photo by PUNIT PARANJPE/AFP via Getty Images)
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Google is the latest big name to buy a stake in India’s largest mobile network, the company announced today. The search giant is buying a 7.7 percent stake in Jio Platforms worth $4.5 billion, a sum that is coming from Google’s recently-announced $10 billion Indian investment fund. As well as handing over plenty of cash to the indebted company, Google and Jio will work together on low-cost Android phones. That will help Google extend its footprint in the company as its digital transformation takes place. 

This is the fourth major investment by a major tech player in Jio over the last few months, starting with Facebook in April. It spent $5.7 billion to gain a 9.9 percent stake in the telecommunications company as part of its longstanding ambition to get ahead in the Indian market. Naturally, as we reported back then, Jio doesn’t just offer internet access, but has its own e-commerce, big data, cloud computing and AI outlets, making it closer to say, Amazon or Alibaba than a basic carrier.

That was followed in early July by a $250 million investment by Intel Capital, the chip giant’s investment division, which picked up a 0.39 percent stake. Just a few days later, Qualcomm’s own financial division paid around $97 million for a 0.15 percent stake of Jio. Naturally, the focus there was on the use of cloud computing, 5G and other technologies that Intel and Qualcomm can help work with Jio on. 

Jio became India’s biggest mobile network, as well as offering other digital services, by spending big to offer reliable, low-cost service to millions of Indians. That left the company with significant debt, which these investments -- as well as a chunk of cash from Saudi Arabia -- has now paid off. Fortune believes that Jio’s head, Mukesh Ambani is preparing the company for an IPO in the hope of a blockbuster initial valuation. If that’s the case, then it may not take very long for these investments to start bearing significant fruit for the companies which made them. 

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