Facebook was reportedly in talks with Reliance Jio to purchase 10% of the Indian telco, according to a report in the Financial Times. According to the paper, this 10% stake was being valued in billions of dollars. The report also added that aside from the social media giant, Reliance Jio was also in separate talks with Google.
As per the FT report (paywall), Facebook and Reliance Jio had been in talks which only halted recently owing to global travel bans because of the coronavirus outbreak, according to two people familiar with the matter.
According to a report published in November, Jio's valuation is somewhere between $65-70 billion (or approximately between Rs 5,000 crore and Rs 5,350 crore), so a 10% stake would be somewhere between $6.5 — 7 billion.
Reliance Jio soft launched in 2015, but started its public operations in 2016. In just three years, it has become the largest telecom operator in India with over 370 million subscribers, and created a huge disruption in the market, offering free calls and extremely cheap data, which has continued to have lasting effects in the telecom business to this date.
For companies like Facebook, Jio could represent a doorway into India and also into a market with complex regulatory challenges — something that a large local player like Reliance has a greater degree of insight into.
Facebook has run up against numerous challenges in India, from the resistance to the launch of its free Internet program called Free Basics, to the difficulties it has faced in launching payments over UPI with WhatsApp, or even the various calls from the government to remove encryption from the popular messaging service.
The two companies have not offered any comments at the moment.