Google joins Facebook on Jio Platforms investor roster

Reliance Industries announced the transaction in a statement. External capital committed to the seven-month-old company is expected to total INR1.5 trillion ($20 billion) with 14 investors set to collectively own nearly a third of the business. 

Google will invest from the $10 billion India digitization fund announced a day earlier. The two companies said they intend to develop a low-cost smart phone that would allow users to access 4G or 5G data networks. Currently, a majority of India's low-income population uses devices known as feature phones that can only access data services through older 2G telecom networks.   

Jio Platforms is the parent of India's Reliance Jio Telecom, the country's leading mobile carrier. Reliance has positioned Jio Platforms' app ecosystem as a gateway to the internet for first-time users of mobile internet services. The app ecosystem concept is comparable to those of Indonesia's Gojek or China's WeChat.

Several Jio-branded internet apps offering services ranging from video content, e-commerce to music have been developed that are available on a standalone basis and also as mini-apps within the MyJio super app – which is primarily used by Jio Telecom prepaid subscribers to increase the stored value within their account.

Meanwhile, other subsidiaries are working to improve the company's presence in broadband and cable services. The idea is that these apps and services will allow Jio Platforms to offer a compelling package for subscribers, leading to increased demand for internet data services for use within smart phones and televisions.   

At the same time, a network of Jio-branded convenience stores are being built to fulfill online orders on JioMart, a daily goods-themed e-commerce platform. The chain of convenience stores will act as independent distributors with Jio branding on the storefront. The conglomerate counts Reliance Retail, a related subsidiary, as a partner and the latter owns the country's largest network of brick-and-mortar retail stores.

Facebook, which is also an investor in the company, is expected to work with JioMart so that customers can order goods on the platform from within the WhatsApp messaging app. 

The announcement came on the day of Reliance's annual general meeting. Mukesh Ambani, the company's chairman, said the conglomerate would also bring financial and strategic investors into Reliance Retail. Goals include selling electronics and fashion items on JioMart and becoming the first telecom carrier to offer 5G services in India. An auction for 5G licenses is slated to take place next year. Rival carrier Airtel has said the base price is too high.  

Several media reports in recent months have indicated that Jio Platforms plans to pursue a US listing next year with a target valuation of $90-95 billion. Reliance says Jio is currently valued at INR4.91 trillion ($65 billion).

Reliance, which mostly gets its revenue from oil-related activities, has INR3.36 trillion in outstanding debt. The company has declared an ambition to eliminate net debt by the end of the current financial year and raised INR531.2 billion in capital through a discounted rights issue last month.

Saudi Aramco, the world's biggest oil exporter, previously agreed to acquire a 20% stake for Reliance's oil-to-chemicals division for $15 billion last year but Ambani revealed that the deal has yet to be finalized. A collapse in oil prices is said to have caused delays.

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