In: Finance
In its largest foreign investment of $5.7 billion, Facebook is taking a 10% stake in Indian telecommunications operator Jio Platforms. The Indian firm’s subsidiary, Reliance, has upended India’s mobile sector by spending billions to build a nationwide 4G network and offer dirt-cheap data plans, which hundreds of millions of poor Indians have used to enter the internet economy for the first time. The union provides Jio with cash, Facebook’s WhatsApp, and access to Facebook’s expertise in reaching consumers and using their information to sell ads.
Q1 -Why does Reliance need Facebook in the Indian digital market?
Q2 - Why does Facebook need Reliance?
Q3 - Is this an alliance of equals or does Reliance risk being squashed by Facebook in the relationship?
1]
Reliance needs Facebook in the Indian digital market because :
2]
Facebook needs Reliance because :
3]
This is an alliance of equals. Reliance is one of the biggest Indian conglomerates, with huge influence. Reliance retains 90.01% of Jio, and Facebook has less than 10%. Reliance does not risk being squashed by Facebook in the relationship. It is a mutually beneficial relationship because each company has its strengths which they contribute to Jio.