Facebook is pouring US$5.7 billion [AU$90 billion] in Jio Platforms, the digital services arm of Indian conglomerate Reliance Industries, in an attempt to gain a foothold in India’s growing mobile internet industry.
The move is also seen as Facebook’s attempt to monetize its WhatsApp userbase in India, which currently stands at 400 million.
Facebook is also reportedly planning to introduce a payment feature for WhatsApp in India, making the deal all the more significant.
Reports said the investment will give Facebook a 9.9% stake in Jio Platform that runs Reliance Jio, a telecom operator in India with a little over 370 million mobile service subscribers.
Largest deal for Facebook
The $5.7-billion deal is said to be the largest for Facebook. Founder and CEO Mark Zuckerberg in a Facebook post said:
“Facebook is teaming up with Jio Platforms – we’re making a financial investment, and more than that, we’re committing to work together on some major projects that will open up commerce opportunities for people across India.”
The executive said India currently has the largest communities on Facebook and WhatsApp and is “in the middle of a major digital transformation.”
He further claims that Jio Platform has “played a big part” in shepherding small businesses and millions of Indian users to go digital.
“This is especially important right now, because small businesses are the core of every economy and they need our support. India has more than 60 million small businesses and millions of people rely on them for jobs,” Zuckerberg said.
Facebook’s previous projects in India thumbed down
This is not the social media giant’s first attempt at getting a piece of the massive tech services pie in India.
In 2016, Facebook introduced a service called “Free Basics” in the country, but Indian regulators thumbed down the project.
Mahesh Murthy, co-founder of Indian venture capital firm Seedfund, claimed that the “Free Basics” content was questionable, which noticeably excluded content that is popular among Indian users – for example, Google, YouTube, LinkedIn, Twitter, and Amazon.
Murthy added, talking about Indian publishers invited to the “Free Basics” program:
“Most of them declined for two reasons: no site wants to hand over user data to Facebook and they believe in net neutrality.”
The new deal, however, signals a brighter prospect for Facebook in the Indian community.
Facebook’s struggles with Libra Association
Facebook is also active in other areas, particularly the Libra Association, which the social media giant is currently supporting.
The Libra Association is pushing for a new cryptocurrency aptly called Libra, built on a permissioned blockchain network in order to push for more independent governance, security, and scalability.
It was not smooth-sailing for Facebook, however, after it was criticized for attempting to become a bank or a financial institution with the Libra project. In a recent development, the Libra Association is attempting to win the nod of regulators.