Menlo Park, California-based Facebook is in discussions with Mukesh Ambani-led Reliance Jio to acquire a stake in the telecom behemoth, a media report said.
The social media giant is likely to pick up a 10% stake in Reliance Jio in a multibillion-dollar deal to mark a deeper entry into India’s digital space, the Financial Times reported.
Reliance Jio, which is valued at over $60 billion by research firm Sanford C Bernstein & Co, has grown rapidly to amass over 370 million subscribers in three-and-a-half years since its launch.
After disrupting the telecom industry by offering competitively priced high-speed internet access since 2016, Reliance Jio forayed into the broadband and home entertainment space with JioFiber. The company also took on Amazon and Flipkart, by venturing into India’s booming ecommerce market with a soft launch of JioMart late last year.
According to the report, search engine giant Google had also shown interest in investing in Reliance Jio in the past while separate media reports last year had said Japan’s SoftBank was discussing with Reliance Jio to buy a $2-3 billion stake in the company.
Email queries sent to Facebook and Reliance Jio did not elicit responses at the time of publishing this report.
The Reliance Industries-owned telecom subsidiary recorded a debt of Rs 76,212 crore at the end of the March 2019 quarter and these discussions indicate its attempts at reducing the debt.
India is the largest market for Facebook with 328 million monthly users while its messaging app WhatsApp connects over 400 million users in the country.
Facebook has also been making equity bets on Indian startups to connect with India’s digital user base outside its core offering. It has made undisclosed investments in social commerce platform Meesho and online tutoring platform Unacademy.
Facebook’s investment in Reliance Jio comes at a time when the Indian parliament is scheduled to take up the Personal Data Protection Bill for discussion in the second week of the monsoon session. The bill deals with several key issues including exemptions granted to government departments for demanding non-personal data from companies.
Facebook’s Internet.Org initiative, which was aimed to bring 5 billion people online, had come under severe criticism in India for its stance against the concept of Net Neutrality. Facebook had partnered with Reliance Communications to provide free Internet access to 33 websites as part of its Internet.Org initiative.
However, the programme was opposed by free Internet activists who said that it violates the idea of Net Neutrality.
Net neutrality states that equal treatment be given to all internet traffic. The principle prohibits prioritising entity or company based on payment to service providers like telecom companies.
Although the social media giant later renamed "internet.org" as Free Basics by Facebook, Telecom Regulatory Authority of India (TRAI) banned the programme on the grounds that it infringed the principles of net neutrality.