As Trump Fights China, Big Tech Savours Jio and India’s Promise
In April, Reliance Industries announced Facebook Inc. would pay almost $6 billion for 9.9% of Jio Platforms, the Indian conglomerate’s telecom and internet unit. The news unleashed a deluge of interest as global investors smelled opportunity and began bombarding the company with queries, spurring Reliance to impose what it called the “7-4-45” rule, strictly rationing access for even A-list companies such as Intel, KKR, Qualcomm, and Silver Lake Capital: seven days to examine the books on a secure website, four hours of virtual meetings with top executives, and—if a deal seemed close—a final 45-minute videoconference with Reliance Chairman Mukesh Ambani.
By mid-July a dozen companies had concluded deals with Reliance, which netted an additional $14 billion, boosting total investment in India’s tech sector so far this year to almost $38 billion. With Jio, the immediate draw was the company’s 388 million mobile subscribers. But just as important—for backers of Jio and other Indian tech outfits—was potential access to a market with more than a half-billion mobile internet subscribers and hundreds of millions more on the way. “This is about the right to play in what promises to be the world’s second-largest digital economy,” says Vijay Shekhar Sharma, founder and chief executive officer of One97 Communications, which runs Paytm, India’s leading digital payments service.
Urvashi shares her perspective on the matter with Bloomberg's Saritha Rai:
Jio’s rise worries some market watchers. Its cutthroat wireless data pricing and packages that offer free voice calls dramatically expanded internet access but helped drive a half-dozen rivals out of business. With its formidable bank account and ties to industry giants, Jio is ready to become a Big Tech player in its own right, says Urvashi Aneja, director of technology consultant Tandem Research. Jio’s expansion, combined with economic fallout from the pandemic, could allow it to crowd out smaller players by giving preference to its own services, Aneja says. “Regulators need to ensure that Jio doesn’t grow into a monopoly,” she says.