In what could be one of the major deals in India's digital market, technology behemoth Facebook is eyeing a stake in Mukesh Ambani's digital operation Reliance Jio to expand its foothold. As per a report published in the Financial Times, Facebook is looking for a 10 percent stake in India's youngest telecom company Reliance Jio.
The deal for a stake sale between Reliance Jio and Facebook was on cards but the negotiations were suspended in between due to global travel bans that have been in place due to coronavirus outbreak. The market responded to the development in a positive manner as the share price of Reliance Industries (RIL) jumped more than 14 percent on the National Stock Exchange (NSE).
India: Battleground for US tech giants
A report published in Mint highlighted that since the beginning of its operation in 2016, Reliance has become the only Indian company able to compete with US technology companies in Indian's ever-growing market. The Mukesh Ambani-led company has aggressively expanded its business from mobile telecoms into everything from home broadband to e-commerce. As per estimates by Bernstein, RJio is valued at around $60bn. But the negotiations don't look simple as another technology giant Google has been holding separate talks with RJio.
Last year, Satya Nadella led Microsoft also showed its interest to partner with Jio to offer cloud computing to businesses. It is to be noted that India has emerged as an important market for technology giant Facebook and its WhatsApp messaging platform, as it already has 400 million users in the country. The jump in the number of internet users is expected to sustain for coming years from 450 million in 2017 to 850 million in 2022, PwC estimated.
Last year, India overtook the US to become the world's second-largest smartphone market only behind China by unit shipments, attracting the attention of the major technology companies from Silicon Valley. But the road ahead is expected to be bumpy given the Indian government's restrictions to overseas businesses operating in the country and proposed Personal Data Protection Bill.