Google has become the latest high-profile firm to back India’sReliance JioPlatforms. 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 hasjoined 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 ofReliance Industries(India’s most valued firm) has raised over $20.6 billion in the past four months from 13 investors by selling about 33% stake in the firm.
Google’s new investment gives Jio Platforms an equity valuation of $58 billion — the same valuation implied by Facebook. Other investors including General Atlantic, Silver Lake, Qualcomm, Intel, and Vista have paid a 12.5% premium for their stake in Jio Platforms.
As part of Wednesday’s strategic announcement, Google and Reliance Jio Platforms will work on a customized-version of Android operating system to develop low-cost, entry-level smartphones to serve the next hundreds of millions of users, said Ambani.
“Getting technology into the hand of more people is a big 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 ground up, how millions of users in India can become owners of smartphones. This effort will unlock new opportunities, further power the vibrant 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 not the first time Jio Platforms has expressed interest in mobile operating system or handsets. The company has shipped at least 40 million JioPhone powered by KaiOS. These “smart feature” phones support a handful of apps including Facebook’s WhatsApp. Google is aninvestor 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 the next 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 joint venture between British giant Vodafone and Indian tycoon Kumar Mangalam Birla’s Aditya Birla Group, in India — to reach 500 million customers by 2023, and control half of the market by 2025.
Google, which like Facebook reaches nearly every online user in India, said on Monday that itplanned to invest $10 billion in Asia’s third largest economyover the next five to seven years. Its investment in Jio Platforms today is part of its $10 billion commitment to India.
Jio Platforms also operates a range of digital services including a music streaming player anda video conferencing app. On Wednesday, Jio Platforms unveiled its newest offering: the Jio Glass.
Jio Platforms executives said Jio Glass wearers will be able to perform video calls and access more than two dozen apps. They did not disclose when Jio Platforms plans to make this new gadget available to consum