Mukesh Ambani
Mukesh Ambani|IANS (File photo)
Business & Economy

Google to invest Rs 33,737 crore in Jio Platforms for 7.73% stake

NetIndian News Network

Mumbai, July 15, 2020

Internet giant Google will invest Rs 33,737 crore for a 7.73 per cent stake in Jio Platforms, a majority-owned subsidiary of the Mukesh Ambani-led Reliance Industries Limited (RIL), an announcement said here today.

The announcement, made by RIL, Jio and Google, said Jio Platforms had signed binding agreements in this regard earlier today with Google International LLC.

Google is investing at an equity valuation of Rs. 4.36 lakh crore.

"Google’s investment will translate into a 7.73% equity stake in Jio Platforms on a fully diluted basis. With this, the total investment from financial and strategic investors into Jio Platforms stands at Rs. 1,52,056 crore," a press release from RIL said.

The release said the investment would build on Jio’s and Google’s existing efforts to expand the benefits of digitization across the length and breadth of India, beyond the current 500+ million Internet users in the country.

Jio Platforms and Google have also entered into a commercial agreement to jointly develop an entry-level affordable smartphone with optimizations to the Android operating system and the Play Store.

"Together we are excited to rethink, from the ground up, how millions of users in India can become owners of smartphones. This effort will unlock new opportunities, further power the vibrant ecosystem of applications and push innovation to drive growth for the new Indian economy," the release said.

Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, “Google has empowered millions of Indians to access helpful information and, like Jio, is a force for change and innovation. We welcome Google onboard and are excited about our partnership for what it can deliver to Indians, from universalising Internet usage to deepening the new digital economy and roviding a prime mover to India’s economic growth. Together, we hope to play a strong facilitative role in the transformative journey of building a new, Digital India.”

Sundar Pichai, CEO of Google and Alphabet, said, “Reliance Industries, and Jio Platforms in particular, deserve a good deal of credit for India’s digital transformation. The pace and scale of digital transformation in India is hugely inspiring for us and reinforces our view that building products for India first helps us build better products for users everywhere. Google is proud to invest Rs 33,737 crore into Jio. I am excited that our joint collaboration will focus on increasing access for hundreds of millions of Indians who don’t currently own a smartphone while improving the mobile experience for all.”

Jio Platforms is a next-generation technology platform focused on providing high-quality and affordable digital services across India, with more than 388 million subscribers. Jio Platforms has made significant investments across its digital ecosystem, powered by leading technologies spanning broadband connectivity, smart devices, cloud and edge computing, big data analytics, artificial intelligence, Internet of Things, augmented and mixed reality and blockchain.

"Jio’s vision is to enable a Digital India for 1.3 billion people and businesses across the country, including small merchants, micro-businesses and farmers so that all of them can enjoy the fruits of inclusive growth. Reliance Jio Infocomm Limited, which provides connectivity services to over 388 million subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms," the release said.

The transaction is subject to regulatory and other applicable customary approvals. Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels.

The law firms Freshfields Bruckhaus Deringer US LLP and J. Sagar Associates advised Google on the transaction.

The latest announcement means that Jio Platforms now has four strategic partners -- Facebook, Intel, Qualcomm and Google, Ambani told the 43rd annual general meeting of RIL held through video conferencing today It has also six most admired technology and financial investors and three sovereign funds, taking the total tally of investors to 14, he said.

The four strategic partners besides bringing in cash are also going to play a strategic role in shaping the future of Jio, he said.

"The Jio-Google partnership is determined to make India 2G-mukt. We believe we can design entry-level 4G or even 5G Smartphone for a fraction of its current cost.

"To power such a value engineered smartphone, we also need an equally value engineered smartphone operating system… and such an Operating System must be designed from grounds-up. Google and Jio are partnering to build just such a smartphone operating system right here in India.

"As India is standing at the doorsteps of the 5G era, we should accelerate the migration of 350 million Indians, who currently use a 2G feature phone, to an affordable smart phone. Jio is commited to provide affordable 4G devices to more than 300 million feature phone users in India. Jiophone still remains the world's most affordable 4G phone," he said.

Ambani said Jio has designed and developed a complete 5G solution from scratch.

"The made-in-India technology can be deployed and launched in a years’ time once spectrum is available. Jio can easily upgrade its 4G network to 5G , since it is all-IP network architecture.

"Once it is proven in India, Jio Platforms would be well positioned to be an exporter of 5G solutions to other telecom operators globally, as a complete managed service," he added.

NNN

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