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Facebook Eyeing Stake In Reliance Jio, FT Reports

The social media giant was close to signing a preliminary deal for 10 percent stake: Financial Times.

Reliance Jio’s advertisement is visible on a board above Airtel’s logo outside a store in Mumbai (Photographer: Vishal Patel/Bloomberg)
Reliance Jio’s advertisement is visible on a board above Airtel’s logo outside a store in Mumbai (Photographer: Vishal Patel/Bloomberg)

Facebook Inc. is in talks to buy a stake in Mukesh Ambani’s Reliance Jio Infocomm Ltd. to expand its footprint in India, Financial Times newspaper reported citing two people privy to the discussions.

The social media giant was close to signing a preliminary deal for 10 percent stake in Jio, one person told FT, but negotiations stalled due to the travel bans that have been implemented since the coronavirus outbreak.

Promoted by India’s richest man, the entry of Reliance Jio proved a turning point in the telecom market, after it stormed in with free voice services for life and free data services to lure subscribers, prompting smaller rivals to merge or quit the market. Jio has been adding, on average, over 7 million users every month on its way to the No. 1 spot among India's wireless carriers.

Analysts at Sanford C. Bernstein & Co. expect Jio to book its first profit next fiscal and become its parent Reliance Industries Ltd.’s biggest revenue churner over the next two years. Bernstein values the telecom operator at over $60 billion.

Ambani also has plans to hive out his retail and telecommunications units within five years and list them separately. The deal would also play into the Reliance’s plan to have zero net debt by March 2021.

BloombergQuint has not independently reached out to Reliance and Facebook to verify the Financial Times’ report.