Google buys $4.5 billion stake in India's biggest mobile network
It's the fourth big tech investment in Jio in recent months.
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.
