Google invests $4.5 billion in India’s Reliance Jio Platforms

Google has become the latest high-profile firm to back India’s Reliance Jio  Platforms. The search giant is investing $4.5 billion for a 7.73% stake in the top Indian telecom network, Reliance Industries chairman Mukesh Ambani said on Wednesday.



The investment today from Google is one of the rare instances where the Android-maker has joined its global rival Facebook in backing a firm. Facebook invested $5.7 billion in Reliance Jio Platforms, which has amassed over 400 million subscribers in less than four years of its existence, in April this year for a 9.99% stake in it. Facebook is the largest minority stakeholder in Jio Platforms.

Jio Platforms, a subsidiary of Reliance Industries (India’s most valued firm) has raised over $20.6 billion within the past four months from 13 investors by selling about 33% stake within the firm.

Google’s new investment gives Jio Platforms an equity valuation of $58 billion — an equivalent valuation implied by Facebook. Other investors including General Atlantic, Silver Lake, Qualcomm, Intel, and Vista have paid a 12.5% premium for his or her stake in Jio Platforms.

As a part of Wednesday’s strategic announcement, Google and Reliance Jio Platforms will work on a customized-version of Android OS to develop low-cost, entry-level smartphones to serve subsequent many many users, said Ambani. These phones will support Google Play and future wireless standard 5G, he said.

“Getting technology into the hand of more people may be a big a part of Google’s mission,” said Sundar Pichai, chief executive at Google, via a video chat on Wednesday. “Together we are excited to rethink, from the bottom up, how many users in India can become owners of smartphones. This effort will unlock new opportunities, further power the colourful ecosystem of applications and push innovation to drive growth for the new Indian economy,” he said.

The new deal further illustrates the opportunities foreign investors see in Jio Platforms that has upended the telecommunications market in India with cut-rate voice calls and mobile data tariffs. this is often not the primary time Jio Platforms has expressed interest in mobile OS or handsets. the corporate has shipped a minimum of 40 million JioPhone powered by KaiOS. These “smart feature” phones support a couple of apps including Facebook’s WhatsApp. Google is an investor in KaiOS’ eponymous developer.

Have been hearing the "Can India produce a Google?" question for the last ten years.

Looking forward to the "Can the US produce a Jio?" question for subsequent ten years.

— Sumanth Raghavendra (@sumanthr) July 15, 2020

Analysts at Bernstein said last month that they expect Jio Platforms — which competes with Bharti Airtel and Vodafone Idea, a venture between British giant Vodafone and Indian tycoon Kumar Mangalam Birla’s Aditya Birla Group, in India — to succeed in 500 million customers by 2023, and control half the market by 2025.

Google, which like Facebook reaches nearly every online user in India, announced a replacement fund on Monday through which it said it plans to take a position $10 billion in Asia’s third largest economy over subsequent five to seven years. Its investment in Jio Platforms today is that the first investment from the Google For India Digitization Fund.

Jio Platforms also operates a variety of digital services including a music streaming player and a video conferencing app. On Wednesday, Jio Platforms unveiled its newest offering: the Jio Glass.

Jio Platforms executives said Jio Glass wearers are going to be ready to perform video calls and access quite twenty-four apps. They didn't disclose when Jio Platforms plans to form this new gadget available to consumers and what it might cost. Jio Platforms has unveiled devices within the past that sometimes take years to succeed in consumers — and sometimes they're quietly abandoned. Jio unveiled an identical pair of spectacles last year.



Some investors have told TechCrunch in recent months that Reliance Jio Platforms’ owner — India’s richest man, Mukesh Ambani — and his closeness to the ruling party in India also are crucial to why the digital unit of Reliance Industries is so attractive to several .

They believe that purchasing a stake in Jio Platforms would lower the regulatory burden they — and their portfolio firms — currently face in India. The investors requested anonymity as they didn't wish to speak about the political tie ups publicly.

A person conversant in the matter at one among the 13 firms that has backed Reliance Jio Platforms said that the Indian firm is additionally enticing as globally companies try to chop down their reliance and exposure on China.

India, and the U.S., in recent months have taken actions to limit their reliance on Chinese firms. New Delhi last month banned 59 apps and services including TikTok that are developed by Chinese firms. Reliance Jio Platforms has interestingly yet to boost capital from any Chinese investor.

“Jio, for its part, has made a unprecedented contribution to India’s technological progress over the past decade. Its investments to expand telecommunications infrastructure, low-cost phones and affordable internet have changed the way its many many subscribers find news and knowledge , communicate with each other , use services and run businesses. Today, Jio is increasing its specialise in the event of areas like digital services, education, healthcare and entertainment which will support economic process and social inclusion at a critical time within the country’s history,” said Pichai.

Reliance Industries, whose core businesses are in petrochemicals, has said in recent months that it plans to list Jio Platforms and Reliance Retail, another subsidiary of the firm, within five years

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