According to recent reports in the UK’s Financial Times newspaper the multibillion-dollar stake in India’s Reliance Jio that Facebook allegedly intends to buy could be delayed.
It seems that Facebook was close to signing a preliminary deal to take a 10 per cent share in Jio, a company whose value is estimated in the tens of billions of dollars, despite the fact that it is apparently carrying a lot of debt.
On this occasion, however, the problem isn’t business-related. Global lockdowns caused by the coronavirus outbreak have held up progress in a market where Facebook already has a strong foothold thanks to the WhatsApp chat service, which has some 400 million users. Reports indicate that Facebook is also about to launch a payments service in India.
Despite its debts, in the mobile communications area Reliance Jio was one of the least hard-hit companies by the recent Supreme Court AGR dues decisions, so is weathering that storm fairly comfortably. Nor should one forget that it instituted – and is so far, arguably, winning – a price war with Vodafone Idea and Bharti Airtel.
Of course Reliance is about a lot more than mobile telecoms. Today it has a stake in home broadband and ecommerce, among other interests, but its vigorously competitive attitude to mobile voice and internet is what has got it a mobile subscriber base of over 370 million. Reliance has also, the FT says, been courted by Google and Microsoft, the latter in a deal to offer cloud computing to businesses.
And of course Facebook can hardly be indifferent to the face that India is a very, very big market with growing numbers of internet and smartphone users, both of which may accelerate, even during (or possible because of) the ongoing lockdown.