US tech giant Facebook is looking to buy a multibillion-dollar stake in Mukesh Ambani's Reliance Jio, reports Financial Times. India's fastest-growing network, Jio, has over 370 million subscribers.
According to the report, Facebook is keen on picking up a 10 per cent stake in Indian telecommunication behemoth, however, the outspread of coronavirus could alter the schedule of signing the deal. Jio is the only company that can possibly take on US tech giants. RIL poured in huge sums of money to expand Reliance Jio and make it the biggest telecom player in the country. This, however, increased the debt burden of Reliance and this deal could help the company to achieve its goal of cutting net debt to zero by March 2021.
To do so, Reliance sought to sell off stakes in its refining business to Saudi Aramco and a $3.3 billion investment by Brookfield in its tower business.
Facebook, which owns WhatsApp and Instagram, will get a significant footing in the Indian telecom market if this deal goes through. It will be crucial for Facebook as it has more users in India than any other single country. But the Indian telecom market has not been easy for the foreign players of late due to the adjusted gross revenue issue, which nearly forced the Vodafone group out of the country.
Moreover, the Personal Data Protection Bill will not make things easier for Facebook. The number of internet users in India is expected to rise to about 850 million in 2022, up from 450m in 2017, according to a PwC.
According to the report in FT, Google was also involved in talks with Jio for the purchase of stake. These developments have come to light after last Microsoft announced plans to partner Jio to offer cloud computing.