Yesterday, social media heavyweight Facebook (NASDAQ:FB) announced a $5.7 billion investment in Jio Platforms Limited. Jio is India's largest telecom operator by subscriber base, sporting 388 million customers. It is part of Reliance Industries Limited, one of India's largest companies. Jio entered the telecom space in late 2016, disrupting the market within no time.
Facebook's investment makes it Jio's largest minority shareholder with a 10% stake. The US-based technology giant aims to collaborate with Jio to create ways for businesses to operate efficiently in a high growth digital economy.
Facebook claims that over 560 million people in India have gained access to the internet in the last five years. With an internet penetration rate of 40%, there is significant room for growth in India over the upcoming decade.
Does this investment mean that Facebook will leverage WhatsApp's popularity in India to diversify into other segments, such as payments and marketing, similar to Tencent's WeChat?
Facebook's press release states, "India is a special country for us. Over the years, Facebook has invested in India to connect people and help businesses launch and grow. WhatsApp is so ingrained in Indian life that it has become a commonly used verb across many Indian languages and dialects."
It added, "We are excited about furthering our investment in India's vibrant digital economy. Our efforts with Jio will be focused on opening new doors and fueling India's economic growth and the prosperity of its people."