Facebook Invests US$5.7 Billion In Indian Telecoms Company
Tech companies have an interesting relationship with India. The country’s cheap data has meant that for smartphone manufacturers – getting their devices in the hands of as many Indians as possible has always been a priority.
For social media and messaging companies, this cheap data has meant many Indians can utilise their applications unlike in many developing countries and one of the biggest beneficiaries of this is Facebook-owned WhatsApp. The instant messaging application is used by 400+ million users in India making the territory one of the most important to Facebook.
This importance is set to grow with the tech giant, recently investing in Jio Platforms Ltd (owned by Reliance) to the tune of US$5.7 billion and getting a 10% stake in return.
Jio has attracted over 385 million subscribers to its network and has the largest percentage of 4G subscribers in India at 65%.
What does Facebook stand to gain?
There are many angles to view this from, and one that has been suggested by many since the announcement of this deal has been that Facebook will finally have an army that can lobby for their interests within India.
When you consider how the Indian Government has given Facebook and WhatsApp particularly trouble in the past having a stake in a local company might ease some of those tensions.
WhatsApp payments has been held up by regulation for over two years now and maybe Facebook believes having an ally within India could’ve changed that.
Outside of the direct connection to Indian regulators, Analysts also expect the shared reach of Jio and Facebook within India to present the company’s with an opportunity to tap into insights on spending and viewing habits.
This makes sense because Facebook and Jio will now be able to team up to provide fuller consumer profiling with Facebook providing data on consumer interests and e-commerce behaviour whilst Jio has consumer spending patterns on the telecoms side.
Many expect that this partnership could result in an eCommerce venture to rival Amazon and Flipkart in the Asian country, and with the wades of data the two already have -there is a possibility that they’ll come into the market with better targeting for consumers using their service.