Udayavni Special

Why Google and Facebook are investing in Reliance Jio

Team Udayavani, Jul 17, 2020, 2:13 PM IST

Google announced it would invest $4.5 billion in India’s Jio Platforms, the unit of Reliance Industries overseeing music, movie, and telecommunications ventures. The investment buys Google a 7.7 percent stake in Jio.

Earlier, Facebook invested Rs 43,574 crore in Jio Platforms, a unit of Reliance Industries NSE 0.47 % Ltd (RIL), for a 9.99% stake

Since April, Jio has raised more than $20 billion from investors including General Atlantic, Qualcomm, Intel, and Silver Lake.

Reliance is expected to become the dominant national player in 5G, with a growing share of the total cellular market. As other global markets are tapped out, India’s appeal is that it still has as many as half a billion people who haven’t come online which means Google and Facebook will have 500 million potential new users

Jio looks set to buy a large portion of the airwaves and be among the first to deploy 5G-ready products for hundreds of millions of Indians.

Also,India banned 59 apps, all owned by Chinese companies, citing data concerns. India’s data sovereignty movement will also put limits on all global companies that collect data. In this scenario, Reliance will be the biggest domestic winner

In 2019, Mukesh Ambani said, “ Data is the new oil and data is the new wealth. India’s data must be controlled and owned by Indian people, and not by corporates, especially global corporations. Today, we have to collectively launch a new movement against data colonisation”

The movement will bring focus on the Indian operations of the US tech giants Google, Facebook, Microsoft and Amazon.

Facebook has faced trouble getting its payments system and Google is facing an antitrust investigation.This is considered to be the hidden agenda behind Google and Facebook investments in Jio

On the other hand, Jio’s partnership with Google will help in increasing its expertise in smart homes, connected cars, and software. Also, low-cost 5G Jio smartphone could be powered by Google’s Android system. Google and Jio are working together on an Android-based operating system, and also building  an affordable smartphone

Jio’s partnership with Facebook could enable synergies through WhatsApp, allowing Reliance to dominate the digital money and e-commerce markets through local corner stores. The company recently launched JioMart, a marketplace that connects consumers with shopowners primarily for basic groceries. It announced that JioMart will expand into fashion, electronics and phones.

Apart from that, Reliance also showed Jio Glass, a mixed-reality product which combines what you see with images projected onto spectacles, similar to Google Glass. It would be used particularly for classroom situations as well as company meetings.

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