Delhi: Facebook is in talks to buy a multibillion-dollar stake in Mukesh Ambani’s digital operation Reliance Jio to expand its presence in the Indian digital market, according to a report by the Financial Times, citing people with knowledge of the discussions.
It added that the Silicon Valley technology giant was close to signing a preliminary deal for a 10 per cent share, but negotiations stalled because of the global travel bans that have been implemented since the coronavirus outbreak.
When contacted a Reliance spokesman declined to comment on the matter.
Since Jio’s launch in 2016, Reliance has emerged as the only company capable of competing with US tech groups in the fast-growing Indian market. It has expanded from mobile telecoms into everything from home broadband to ecommerce.
Analysts at Bernstein valued Jio at more than $60bn. Google had also been engaged in separate talks with Reliance Jio, according to Financial Times.
Facebook and Google could not be contacted immediately for comments, despite attempts by Mint to reach them over phone.
The discussions come after Microsoft last year announced plans to partner with Jio to offer cloud computing to businesses. India has emerged as a vital market for Facebook and its WhatsApp messaging platform, which has 400m users in the country. The number of internet users in India is expected to rise to about 850m in 2022, according to consultancy PwC, up from 450m in 2017.
Facebook overall is now estimated to have more users in India than any other single country.
Meanwhile, the country overtook the US last year to become the world’s second-largest smartphone market after China by unit shipments, according to Counterpoint Research, making it a high priority for Silicon Valley companies as well as their rivals in China.
However, the Indian market has become increasingly difficult for Silicon Valley companies to access, as the government has added restrictions to overseas businesses operating there, including with its proposed Personal Data Protection Bill.
A deal with Facebook was due to be announced later this month, coinciding with the end of the Indian financial year. It would form part of Reliance’s plans to cut net debt to zero by March 2021, the Financial Times said.