Here’s the lowdown on the Facebook-Jio Partnership for customers as well as competitors.
Facebook announced that it has picked up a minority stake in India’s Telecom Behemoth, Reliance’s Jio platforms. The Facebook investment in Jio is valued at Rs. 43, 574 Crore for a 9.99 % stake, making the overall valuation of Jio Platforms at Rs. 4.62 Lakh Crore.
These mindboggling figures indicate the growing power of Jio in a market that is already witnessing a “war of attrition” and a “race to the bottom” competition amongst the existing players such as Vodafone, Idea, and Airtel. Indeed, if not anything, these firms have to be wary of the increasing clout of Reliance over everything from pricing to market share.
The next big revolution for Indian Telecom?
Already, Reliance Jio is giving away data at the lowest rates in the world and as “data is the new oil” – a phrase made famous by none other its chairperson, Mukesh Ambani) – means that the partnership between Facebook and Jio could upend the strategies of rivals and make them redundant.
With the plan of “monetizing the synergistic” data from Facebook, WhatsApp, and Jio platforms, the future looks bright for them in what can arguably be called the most important market as far as the “next big thing” after China is concerned. This will be the in-built advantage of the Facebook-Jio partnership in terms of acquiring customers.
Why Airtel and Vodafone should be wary?
With other Telecom firms such as Vodafone and Airtel struggling under the weight of retrospective AGR (Adjusted Gross Revenue) payments and cutthroat completion spurred by Reliance’s “bottomless pockets” as far as spending on staying in the market is concerned.
Today’s news should unnerve them as this has the potential to open the floodgates for Jio. With organic synergies between Facebook and Jio, it is easy to see why they can become a Hyper-mart as far as digital is concerned.
What it means for the Indian retail space?
Moreover, it is not only telecom firms but also retailers who need to perk up. With this tie-up, Reliance can realize its ambition of its conquering the Indian retail space with its Jiomart offering working in tandem with Facebook’s awesome user base.
Indeed, while the Indian Kirana stores and other retailers could sway the government to act against Amazon and Walmart – supposedly for unfair business practices- JioMart is an entirely new ballgame for them as it is an Indian firm and more importantly, one that is on the “right side” of the ruling dispensation.
Should consumers rejoice?
So, is it only competitors who should be concerned and not consumers? For Indian customers, they can now leverage the combined power of their favorite digital platforms with the Facebook-Jio partnership. However, they should also be conscious of the fact that such Oligopolistic formations do not augur well for the way they can become undisputed Numero Uno firms and in the process, exerting control over everything from data, privacy, and pricing.
History tells us that customers should always be cautious of Oligopolistic formations.
In addition, such concerns also mirror the earlier instances of how Facebook tried to muscle its way into India with its Free Basics program. Of course, this is something that the regulators have to take note of and the outcome of which should define the contours of the “great game” for the Indian digital space in the coming months.
A sign of things to come
Having said that, the partnership between Facebook and Jio is the much needed shot in the arm as far as valuations of the Telecom giants are concerned. One can sniff other biggies such as Google watching with anticipation of other Megadeals that can hopefully, revive the fortunes of the likes of Airtel and Vodafone. Moreover, this is also a good sign that the Indian Telecom market is maturing and is now ready to go global with its offerings.
Watch this space for more on the evolving and fascinating moves at play as the Reliance – Facebook venture is sure to reenergize and reinvigorate multiple sectors. After all, you have the most happening, Mark Zuckerberg of Facebook, and Asia’s richest person, Mukesh Ambani joining hands in what can be called the Deal of the Decade.