Facebook has never been privy to billion-dollar acquisitions. From buying Instagram for $1 billion in 2012 to WhatsApp in 2014 for $19 billion, the social media emperor has made yet another paramount investment. It has acquired a minority stake of 9.99% in Reliance Jio for $5.7 billion, thus marking a quirky entry into India’s telecom threshold.
While Facebook does not have huge R&D or development centers at Bangalore and has not made a big investment in India for almost a decade now, this sudden and massive push in the biggest global consumer market is really conspicuous.
Jio’s 380 million wide user base in India has been a result of a revolution in the Indian telecom sector in 2017 when it provided free data and calls for almost 6 months. It is now the biggest mobile carrier in the country in terms of revenue and subscriber base, surpassing tycoons like Airtel and Idea-Vodafone.
Facebook boasts of 300 million daily active users on its social media platform. Additionally, WhatsApp is its most downloaded app in the country followed by Instagram. WhatsApp has already provided a customer service tool in India to let retailers or businesses talk to the customers directly. When blended with the Jio Platform, the venture can sweep the market, thus blindsiding Airtel and Idea-Vodafone which are already bearing the brunt of heavy fines imposed by the Supreme Court. This new integration, therefore, can digitize the retail platforms in India.
For decades, Facebook and Google have enjoyed a duopoly in the Indian market. In recent times, the Chinese ByteDance’s TikTok has swept away most of their users and this deal can help the American company to gain them back.
Facebook launched WhatsApp Pay last year but was not able to garner a sufficient audience due to RBI regulations and a court case that necessitated it to continue its functionality in the beta version. It is being speculated that both Facebook and Jio might now monetize WhatsApp to gain a healthy base among the middle-class businessmen and Kirana stores in India to promote JioMart.
While the social media giant has faced much scrutiny under the NDA government, Mr Mukesh Ambani is a close ally of the Prime Minister. This venture can help India to realize its dream of Digital India and help WhatsApp to steer clear of the regulatory hurdles faced in the country.