Facebook is in talks with Mukesh-Ambani led Reliance Jio to acquire a 10 per cent stake in the Indian telco. The deal is supposed to be a “multi-billion dollar” deal.
The discussions have currently been paused due to travel restrictions across the globe in light of the COVID-19.
The deal will help Facebook expand its reach in the Indian digital market. Jio, the telecom subsidiary of Reliance Industries (RIL), is present in a number of segments including mobile telecom, home broadband and even e-commerce.
Reliance Jio also owns a suite of services including music streaming service JioSaavn, on-demand live television service JioTV and payments service JioPay.
Earlier this year, Reliance Industries announced JioMart, a joint venture between Reliance Jio and Reliance Retail, the nation’s largest retail chain, to soft-launch an e-commerce business.
Facebook, which is beginning to see competition from ByteDance’s TikTok in India, has started to take interest in local startups. Last year, the firm made an investment in social commerce Meesho; and last month, it wrote a check to edtech startup Unacademy.
Kotak Institutional Equities said that Facebook’s reported interest may be driven to enhance addressable opportunity in its largest market in terms of subscriber base. While Jio’s engagement levels with its own subscribers through the digital ecosystem may have an appeal, it is yet to be commercialised beyond connectivity service on a larger scale.
“Unauthenticated media articles indicate that Facebook was in discussions with RIL to take a minority 10 per cent stake in the latter’s digital business under Jio; however, the talks have been stalled for now amid travel restrictions due to the Covid-19 outbreak,” Kotak said.