Industry leaders applaud Facebook-Jio deal; say India to be growth epicentre post COVID crisis

Facebook's Rs 43,574 crore-investment in Jio Platforms earned accolades from industry leaders even as some internet activists raised privacy concerns.

New Delhi: Facebook's Rs 43,574 crore-investment in Jio Platforms earned accolades from industry leaders on Wednesday, even as some internet activists raised privacy concerns.

Mahindra Group Chairman Anand Mahindra said the investment is strong signal of India's economic importance and further projects the country as the centre for new growth post the coronavirus crisis.

"Jio's deal with Facebook is good not just for the two of them. Coming as it does during the virus-crisis, it is a strong signal of India's economic importance post the crisis. It strengthens hypotheses that the world will pivot to India as a new growth epicentre. Bravo Mukesh!" Mahindra said in a tweet.

Facebook announced an investment of USD 5.7 billion (Rs 43,574 crore) to buy 9.99 per cent stake in the firm that houses Ambani's telecom arm Jio, as the social media giant looks to expand presence in its largest market in terms of subscriber base.

The deal values Jio Platforms at Rs 4.62 lakh crore pre-money enterprise value (USD 65.95 billion, assuming a conversion rate of Rs 70 to a US dollar).

This is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India. The investment values Jio Platforms amongst the top five listed companies in India by market capitalization, within just three and a half years of launch of commercial services.

Jio Platforms, Reliance Retail and WhatsApp have also entered into a commercial partnership agreement to further accelerate Reliance Retail's new commerce business on the JioMart platform using WhatsApp.

Digial payments firm Paytm's founder and CEO Vijay Shekhar Sharma tweeted, "This is extraordinary at so many levels. #GODStatus."

JioMart's business model will compete with Paytm services.

WhatsApp has applied for a digital payment licence to facilitate UPI-based transactions. However, it is yet to receive permit due to security issues flagged by the Ministry of Electronics and IT.

Former IT and telecom minister Milind Deora said the deal is a respite in the present scenario.

"Welcome respite from our daily doom & gloom. Mukesh Ambani always envisioned @reliancejio as a global internet company, not merely an Indian telco. As we consume more & more data, Jio's partnership with @Facebook could enable India to become a world leader in AI innovation," Deora tweeted.

However, Save The Internet co-founder Nikhil Pahwa said that people need to be watchful about the deal.

"Jio is much more powerful than in 2015. FB (Facebook) remains the same. The government isn't as open to public opinion on issues like privacy, encryption etc anymore. Civil society is much weaker than in 2015. We will have to be watchful," Pahwa said.

(PTI Report)