Well, just when we thought that the current COVID-19 outbreak had brought the world to a standstill, affecting businesses and economy worldwide, social media giant Facebook has struck talks with the very successful Reliance Jio corporation.
The US company is looking to buy a 10% stake in Reliance Jio, which is valued at upward of 60 billion dollars. The deal though had to wait because of the travel constraints applied recently.
But What’s In This Deal For Jio?
Reliance Jio is in heavy debt, which was reported to be 1,709 billion rupees in the FY (financial year) 2020 and will rise up to 1,770 billion rupees by FY 2021. According to Financial Times, this deal will run in billions of dollars and will be a real relief for the telecom giant.
As of now, Jio is offering free broadband and double data due to the lockdown incorporated. This further increases the popularity of the household name that took the Indian telecom sector by storm 4 years ago. Also, Jio keeps expanding its services and needs some big names in its lists of investors.
Facebook’s New Interest – Startups
Last year, Facebook invested in a startup named Meesho created by an IIT alumni. Though the amount was undisclosed, it can be said that it was pretty considerable as Meesho was valued for about 250 million dollars.
Also Read: Novel Coronavirus: A Blessing In Disguise?
Still, the move for Jio comes as a surprise as it is now a full-fledged corporation. One of the reasons might be the sheer amount of areas Jio has been venturing into lately. The company has not only cemented its place in music – all thanks to JioSaavn but has also taken many other fields by storm. The latest being the much-hyped optical fiber service, which promises speeds up to 1Gbps.
But Jio is known for kickstarting the Indian Telecom War. A war that shut down companies and led to the merger of few. With a user base of 369.93 million, Jio is the largest telecom operator in India. Facebook is eyeing all those users and will strike gold if the deal goes through.
Facebook has recently faced a lot of competition from the Chinese startup – TikTok. Facebook and Instagram Video have not captivated the market as they thought it could. Privacy issues also resulted in the company’s troubled reputation.
All these recent incidents are a sign that Facebook needs to update its business model. And I think, it is being done quite successfully.
Image Sources: Google Images
Find Blogger @ShreyashDhumal3