In what is deemed as one of the largest foreign direct investment deals in India’s tech sector, Facebook has invested approximately Rs. 43,574 crore or $5.7 billion in Jio Platforms Limited. Through this, Zuckerberg’s company now owns a stake of 9.99% in Jio Platforms, making Facebook the largest minority stakeholder in one of the largest mobile network operators in India. With Jio’s 4G network and a host of mobile inventions enabling more and more Indians to join the internet throughout the country, this investment is going to have a large scalable impact on the economy in the post-COVID era.
Reliance has claimed this to be the “largest investment for a minority stake by a technology company anywhere in the world”. This partnership between two giants to accelerate India’s digital transformation stands on the fact that Jio has experienced unprecedented growth since its launch in 2016. With approximately 388 million subscribers, Jio has moved grounds to enable the rural population to be connected to the internet as well.
Facebook announced that “in the past five years, more than 560 million people in India have gained access to the Internet. Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small business across India. They account for the majority of jobs in the country, and form the heart and soul of rural and urban communities alike”.
WhatsApp – which is owned by Facebook – plays a huge role in the fabric of the Indian society. This collaboration between Facebook and Jio aims to empower small businesses of ‘small merchants and kirana shops’ (which are small local shops selling everyday staples and groceries) by integrating What’s App on Reliance Retail’s new commerce platform – JioMart – thus enabling, users and sellers to connect seamlessly.
Playing a strong role even during the 2019 elections, WhatsApp has also begun to reform lives of farmers through smallholder WhatsApp groups – where farmers share their stories and experiences in order to help others get the best possible yield. One strong example is the Hoy Amhi Shetkari (HAS, meaning ‘yes, we are farmers’) group on WhatsApp and Facebook which was set up in Maharashtra by Amol Patil and agriculture PhD Ankush Chormule. According to the Economic Times, more than 600,000 farmers are associated with the HAS group. Additionally, HAS also has a YouTube channel and conducts regular field workshops for farmers.
Jio announced that their “focus will be India’s 60 million micro, small and medium businesses, 120 million farmers, 30 million small merchants and millions of small and medium enterprises in the informal sector, in addition to empowering people seeking various digital services”. Jio’s efforts to help farmers through the Jio Krishi App – which helps farmers with precision farming practices through data-driven decisions – is still in its early stages and thus, it’d be disingenuous to jump to conclusions so soon.
Jio is championing the Indian telecom market, and with great 4G internet deals and packages, more and more people are buying Jio’s services, and preferring it over existing long-term service providers. Facebook, unlike other giants like Amazon and Google, hasn’t yet launched a payment platform (like Google Pay, etc.) in India yet. With WhatsApp Pay getting the regulatory approval earlier this year, will this be an opportunity for Facebook to jump right in? Only time will tell. And if they do, it sure seems to be a great move given Jio’s reach to hundreds of millions of people. With the Cambridge Analytica data scandal in 2018 still in Facebook’s shadows, it’s unclear as to what sort of user data will they have access to through Jio’s colossal network.
One thing is for sure, with smartphones being accessible to everyone, and with the influx of those preferring to use Jio’s digital services, this $5.7 billion investment by Facebook can be deemed as a masterstroke, which will give Reliance the ability to push their network into the almost every nook and corner of our vast country.