Google backs Reliance’s Jio Platforms with $4.5 billion India investment
By Sankalp Phartiyal, Nidhi Verma and Paresh Dave
NEW DELHI/OAKLAND (Reuters) – Alphabet Inc’s Google will invest $4.5 billion in Reliance Industries’ digital unit, the Indian group said on Wednesday as it laid out an ambitious roadmap for its businesses ranging from entertainment to retail.
Google will get a 7.7% stake in Jio Platforms – the unit which houses Reliance’s music, movie apps and telecoms venture – Reliance chairman Mukesh Ambani told the group’s annual shareholder meeting, keeping up the tradition of making big announcements at the event.
Reliance, India’s most highly-valued company controlled by billionaire Ambani, has now sold nearly 33% of Jio Platforms raising 1.52 trillion rupees ($20.22 billion) since late April with Facebook buying a 9.99% stake for $5.7 billion.
Google will gain a seat on Jio Platforms’ board alongside Facebook following the transaction.
The latest investment announced on Wednesday comes just days after Alphabet Inc said it would invest $10 billion in India via a so-called digitisation fund over the next five to seven years through equity deals and tie-ups.
“As we end our current cycle of capital raising, we are delighted to welcome another strategic partner into Jio,” Ambani said.
The deal with Google will bolster Reliance’s tech ambitions, such as building smart homes, using solutions similar to Amazon.com Inc’s Alexa voice assistant, connected cars and security systems.
Jio aims to design a low-cost “4G or even 5G smartphone” for India, Ambani said, in a move that is likely to get tens of millions of Indians to use mobile internet for the first time.
The company, he said, will collaborate with Google to build an Android-based operating system for this new device.
“We want to ensure smartphones along with apps and services in the Play store are within reach for many more Indians,” Sameer Samat, vice president for Android and Play at Google, told Reuters.
“Given the pace of innovation in India, we felt like now was the right time to dramatically increase our commitment.”
Samat declined to give details on the new device or partners Google and Reliance may enlist to help manufacture it.
Google has previously invested in KaiOS, a mobile operating system maker that powers Reliance’s low-cost JioPhone, a basic phone with limited apps.
Jio Infocomm, the mainstay of Jio Platforms and India’s largest mobile carrier with more than 387 million users, will also widen Google’s reach in a country where just about 500 million of its 1.3 billion population use the internet.
“Through this partnership with Jio Platforms we see the chance to have an even greater impact than either company could have alone,” Alphabet CEO Sundar Pichai said in a video message, adding that the Jio investment was “the first and the biggest” investment Google would make via its $10 billion fund.
Google could potentially also benefit from Ambani’s closeness to the nationalist government of Prime Minister Narendra Modi which has taken a hard stand on issues such as data localisation and digital taxes, a headache for big tech firms such as Facebook and Google.
Reliance, which has also won the backing of Qualcomm Inc and Intel Corp for Jio Platforms, has built an in-house 5G solution and is ready for trials as soon as 5G airwaves are available, Ambani said.
Ambani did not specify what this solution was, but said Jio would be well-positioned to export it once it reaches scale.
He said the group had also received “strong interest from strategic and financial investors” in Reliance Retail, adding: “We will induct global partners and investors in Reliance Retail in the next few quarters.”
He said JioMart, Reliance Retail’s e-commerce venture which was launched in March, will expand beyond grocery deliveries to sell electronics and fashion. It currently offers free express grocery delivery from neighbourhood mom-and-pop stores.
Reliance also showed off its tech prowess on Wednesday by unveiling two new gadgets: an Apple TV-like new, set-top box with improved features over the previous iteration, and JioGlass, a device that connects to internet for video calls and allows for hosting of online classes.
Ambani’s daughter Isha Ambani demonstrated the educational and healthcare uses of JioMeet, a newly launched video conferencing tool that is free and rivals Zoom Video Communications Inc’s app.
(Reporting by Sankalp Phartiyal, Nidhi Verma and Paresh Dave; Additional reporting by Abhirup Roy; editing by Louise Heavens, Elaine Hardcastle and Emelia Sithole-Matarise)