“Jio means TO LIVE and to BE ALIVE. To every opportunity and realize the potential of every Indian”, this is what Mukesh Ambani had said on September 1, 2016 when he formally launched Reliance Jio at the annual general meeting of Reliance Industries.
He had also said that Reliance decided to invest in the industry (of telecommunication and technology) because of the “opportunity to transform India”.
Ambani’s belief, and the ambition to transform the lives of 1.3 billion Indians got a big validation today. The world’s biggest digital technology company Facebook is investing Rs 43,500 crore in all cash deal for a 9.9 percent equity in Reliance Jio valuing the company at Rs 4.62 lakh crore -- more than the value of all other telecom operators in India put together.
Reliance Jio is not just a telecom company. It entered the crowded telecom space at a time when every telecom company was under stress. What Reliance Jio has done is that it used the telecom backbone to bring around 400 million Indians, reaching even the poorest of citizens, to use internet. That’s almost a third of India's population.
With voice being free, and data available at a nominal cost, Jio has transformed communication, entertainment and shopping for those 400 million Indians, among other things. As Bloomberg noted “Ambani’s strategy has three connected elements: carriage, content and commerce”.
A few years ago, Facebook’s Mark Zuckerberg launched Facebook for All – an initiative that made Facebook accessible on feature phones without internet. The aim was to bring more people to use Facebook in countries like India where majority were using handsets that were not internet connected.
Jio has changed that. It made smartphones available at low costs and made internet available to each of them by bringing down the data price.
Today’s Facebook-Jio deal reinforces Reliance Jio as a tech and platform company. The investment is a big statement of the faith in the vision based on which Reliance Jio was started.
With the deal, Facebook instantly gets access to 400 million Jio customers for its flagship social media platform, instant messaging service WhatsApp. Also, this comes at a time when Facebook is piloting WhatsApp Pay, the payment service. Backed by Jio’s dream to combine physical retail with the digital world, Facebook’s WhatsApp Pay could transform India’s digital payments market. This again is in line with Prime Minister Narendra Modi’s dream of transforming India into a less cash economy.
As Facebook said in its statement, the deal would bring together JioMart and WhatsApp to enable people to connect with businesses. Once that happens, an estimated 30 million kirana stores will be doing business the way they have never done before backed by JioMart. In these difficult times, the kirana stores are the ones that have stayed open and served customers. This partnership will give them a fresh lease of life as they face competition from organised forms of retail and also protect the millions of workers who toil in these shops and deliver goods.
The game is going to change faster than the market probably had imagined. The Facebook investment should help Reliance go debt free by March 2021. Together, Facebook and Reliance Jio could potentially transform the lives of 1.3 billion Indians – something that Ambani had dreamt of when he started Jio.
To add to that, the investment – which is one of the largest tech deals – comes at a time when the whole world is facing an unprecedented lockdown due to COVID-19 pandemic forcing every business to rework its strategy to survive these difficult times. It is a sentiment changer in these dark times.
Today the stock, which has hit upper circuit, is pulling up the broader stock market with it. It is, indeed, a vote of confidence in India Inc.
Catch our entire coverage on the Facebook-Jio Deal here.
Disclaimer: Reliance Industries Ltd., which also owns Jio, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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