Facebook invests more than 5 billion in the main Indian operator 4G and displays its ambitions on online commerce

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The operator Jio, which has democratized access to 4G in India, has just let Facebook into its capital. Four years after the failure of the Internet.org initiative, the social network thus consolidates its central position in Indian digital life.

In relative discretion, Facebook announced this week the second biggest investment in its history after the acquisition of WhatsApp. Certainly far from the more than 20 billion dollars finally spent on crunching the messaging service, the social network has just signed a check for 5.7 billion dollars (about 5.3 billion euros) to afford 9, 9% of Jio Platforms, an Indian group which notably owns the eponymous operator. In the country, Jio is anything but light: it has nearly 400 million customers on its mobile offers, launched at very low prices and exclusively on the 4G network in 2015. This represents approximately two thirds of the market, and operator is now going on the offensive on fiber.

Neither Facebook nor the operator hide about the reasons for this merger. The social network, for its part, sees in the transaction a royal way to shape a little more the habits of Indian mobile users, who are already largely won over to the cause of WhatsApp (400 million users) and Instagram. In his press release, the firm talks in particular about developing the activity of small businesses, against the backdrop of the democratization of WhatsApp as an online business platform, in particular behind Jio's solution, JioMart. So far, Amazon and Flipkart have carved out the lion's share of the Indian market (each more than 30% of the market).

Jio and its main shareholder, Reliance Industries, welcome the arrival of an expert partner in the analysis and monetization of data, not hesitating to underline the mass represented by the combined audience of all the services of two groups in India. No concrete plan has yet been defined, but Reliance Industries would be very open to suggestions and new ideas possible with the support of Facebook, the opportunities covering a very wide spectrum from the education sector to that of health.

Facebook buys a return in good graces

For Facebook, this entry into the capital of Jio Platforms is also doubly strategic. Indeed, the social network has had very difficult relations with the Indian government since 2015 and the Internet.org episode (now Free Basics). As a reminder, Facebook offered free Internet access via mobile network, but restricted to a handful of services – including, of course, its social network. The authorities did not appreciate this truncated vision of the Internet and, in early 2016, had in fact banned the service based on the arguments of net neutrality and a discriminatory practice for operators.

By injecting several billion into India, Facebook is in a way buying an image from the same authorities, but the firm above all gains a colossal ally. Reliance Industries is a titan, the first capitalization of India, whose activities do not stop at telecommunications, but also include energy (oil) or trade in general. His boss is, moreover, the richest man in Asia, and he does not hesitate to advise the Indian government. Suffice to say that the political weight of this new partner should guarantee Facebook a certain tranquility in its local activities and provide a lever of choice if, by chance, negotiations should be necessary with the authorities.

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