Facebook reportedly close to buying 10% of Reliance Jio

Social media giant Facebook seems set to continue its push into telecoms with a major stake in India’s dominant operator group.

The rumour comes courtesy of the FT, which knows some people who know some people. According to only one of them Facebook was about to close a deal in which it would buy 10% of Reliance Jio when the coronavirus pandemic caused the world to grind to a halt. Presumably Zuck doesn’t fancy sealing such a big deal over Facebook Messenger video chat.

While Jio is owned by the richest man in India, it has had to borrow heavily to fund its nationwide rollout and give connectivity away for free to millions of Indians. At current estimated valuations 10% of the company is worth around $6 billion, which would pay off a few bills.

Facebook’s sudden interest in buying chunks of operators on the other side of the world is less obvious. The most likely reason would be to get its services – Facebook, WhatsApp, Instagram, etc – to the front of the queue when it comes to preinstallation on Jio phones.

$6 billion is a lot of cash to blow on a bit of queue-jumping, however, so Facebook must be pretty confident of a healthy return in the form of advertising to what will soon be the world’s most populous country. As Vodafone is discovering, the Indian telecom market is a minefield, but having said that, if you were going to invest in anyone there, it would have to be Jio.