At the Google for India live event earlier this week, Google announced a $10 billion Digitization Fund to help India become technologically self-reliant. This fund is intended to aid in the easy availability of internet and mobile phones to India’s 1.35 billion-strong. Although Google has designated this fund for the next 5-7 years, it has already made its first – and massive – investment. Google has already exhausted 45% of the amount, as it has bought a 7.73% stake in Reliance Jio, India’s youngest yet largest telecom operator, for $4.5 billion (₹33,737 crores).
At Reliance Industries’ Annual General Meeting today, it was announced that this $4.5 billion investment will be used to realize digitization goals for India, including the revamping and expansion of the 4G network further as well as the co-development of an entry-level smartphone in India with an optimized Android and Play Store experience.
This is the second major investment that Reliance Jio has received from a global tech giant. Back in April, Facebook invested $5.7 billion (₹43,574 crores) in Jio for a 9.99% stake in the telco. Even before Facebook formally announced the investment, Financial Times had reported that both Google and Facebook were eyeing stakes in Jio.
After this investment from Google, Jio stands with $20.2 billion (₹1,52,056 crores) in investments and another $8.1 billion (₹60,753 crores) it raised through a right issue in which it offered shares at discounted prices to the existing shareholders. This brings the cumulative capital raised by Jio to $28.3 billion (₹2,12,809 crores).
Other than developing the smartphone together, Jio could also leverage Google’s software acumen to develop software solutions. The benefits of this software partnership could also be reaped by other arms of Reliance Industries’ multi-faceted business just like Jio’s partnership with Facebook did for JioMart. JioMart is a hyperlocal grocery delivery platform and users can place orders conveniently via WhatsApp.
Interestingly, Reliance Jio also launched JioChat last week and it looks like an apologetic replica of WhatsApp. The news came when Jio was already under criticism for blatantly ripping Zoom – although that seems to have been fixed now.
Qualcomm’s interest in Reliance Jio
Alongside Google, chipmaker Qualcomm is also investing in Jio. In an online statement, Jio announced that Qualcomm Ventures, the investment arm of Qualcomm Inc., has “committed to invest up to” $97.2 million (₹730 crores). This investment will be primarily used for establishing 5G infrastructure in India. It is also possible that as a result of this deal, Qualcomm becomes the vendor supplying mobile chips for the smartphone that Google and Jio jointly develop for the Indian consumers, though this is just speculation from our end.
The post Google buys 7.73% stake in Reliance Jio for ₹33,737 crore ($4.5 billion) appeared first on xda-developers.
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