The largest investment for a minority stake by a technology company anywhere in the world, Facebook today invested in 9.99% stake in Reliance Jio. The deal values at $5.7 billion, or Rs 43,574 crore that puts the pre-money enterprise value of Jio Platforms at Rs 4.62 lakh crore.
Now Facebook needs no special introduction. It is the biggest social media platform of the world and it has expanded its operations by taking over big names like photo-sharing app Instagram and the world’s biggest messaging platform, WhatsApp. Considering India is one of the biggest emerging markets for digital platforms, it is also the biggest market for Facebook having approximately 15% of its entire user base. Even WhatsApp for that matter, about 20% of the entire user base is from India. The company had recorded about 2 billion active users in 2019 and the numbers continue to grow. Many of you might not be aware, but India is also the second-largest user of Instagram in the world with about 8% of the entire user base.
Reliance Jio is fairly new to the business but has already climbed up the social chart. Rolled out in 2016, it is the biggest telecom player of India. Reliance Jio has, in a way, ushered in the 4G revolution in the country by providing fast speed data at very low price plans.
And the effects have been visible, India has seen an increase of 4160% in mobile data usage volume. Data subscribers have also increased to 57% of the total subscriber base compared to 32% before Jio was launched. Thanks to the affordable plans, Reliance Jio has also managed to push up the per-customer voice usage to almost double, which is about 700 minutes per user per month. Thanks to telco, mobile phone bills now cost 41% cheaper and currently, India has the cheapest mobile data anywhere in the world. That is not all, the company also notes that Indians smartphone users now consume the most data in the world, over 11GB data per user per month. This is definitely a big achievement, considering the large population of the country.
In short, the two tech giants couldn’t come at a better time. Not only does India have a deep smartphone and mobile data penetration, but it is also the youngest country to do have it.
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