Why Jio-Facebook May Work Better Than A Google Or Amazon Combination
The partnership between Reliance Jio Infocomm Ltd. and Facebook Inc. could end up delivering more value than a potential combination of Amazon.com Inc. or Google with another Indian telecom operator.
That’s a bet True North Managers’ Haresh Chawla is willing to make.
The media executive-turned-private equity investor predicts that the natural order of evolution in the industry would be global technology giants partnering telecom firms. There are driving forces converging these two sectors together: tech giants need to reduce dependence on advertising revenue while telecom firms need to build an ecosystem of services to retain customers and extract maximum value from them.
For this, India becomes a potent breeding ground due to its large consumer base and accelerating digital adoption, according to Chawla. Telecom firms and tech giants are moving to capitalise on this.
Mukesh Ambani’s Jio Platforms Ltd. has been the first off the block. Jio Platforms has raised almost Rs 1 lakh crore from a clutch of well-known investors led by Facebook, which picked up a 10% stake in Ambani’s digital venture. Deals between Amazon and Bharti Airtel Ltd. and Google and Vodafone Idea Ltd., are also reportedly in the works. Though, to be sure, both Indian companies have denied being in conversation with these tech investors.
Chawla adds Apple Inc. to the mix, suggesting that the iPhone maker will also look to expand its transaction ecosystem in India.