Facebook Friends Jio

The deal with Facebook gives Jio a technology company valuation and a long runway for its next leg of growth

- Samar Srivastava

RIL chairman Mukesh Ambani has spent an estimated ₹250,000 crore building Jio’s network

In December and January the Ambani twins Isha and Akash were hard at work on a potential deal with Facebook. Over multiple trips to the US they negotiated the deal with Facebook executives, with Mukesh Ambani and Mark Zuckerberg coming in once it was almost ready to be signed. In late March the SARS Cov2 outbreak and a ban on international travel slowed things down. But nearly a month into the India lockdown Reliance Industries and Facebook Inc, in the last week of April, announced a $5.7 billion (₹43,574 crore) partnership with Facebook, buying 9.9 percent of Jio Platforms. For Isha who looked after the customer experience at the groups retail and telecom businesses, and Akash who was in charge of the technological aspects of both businesses, the deal marked a clear acceptance of Jio as a tech business.

It followed up on May 4 by announcing a ₹5655.75 crore deal with Silver Lake, a global technology investor, for a 1.1 percent stake in Jio Platforms at a 12.5 percent premium to the price Facebook paid.

Unlike its rivals, Jio never saw itself as just a telecom company. The subsidiary of flagship Reliance Industries was acutely aware that while telecom giants Verizon and Vodafone had spent billions laying out ‘dumb pipes’ to carry data, it was the tech majors Google, Netflix, Facebook and Amazon that had reaped the benefits. It was not a position Reliance’s Chairman Mukesh Ambani, who had spent an estimated ₹250,000 crore building Jio’s network, wanted to find himself in. Monetising the customer was top on his mind.