Google investing $4.5 billion in India’s Reliance Jio Platforms

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Together plan to make millions of Indians owners of smartphones, says Sundar Pichai.

Search engine giant google is investing $4.5 billion for a 7.73% stake in top Indian telecom network Reliance Jio Platforms with plans to jointly develop an entry-level affordable smartphone for millions of Indians.

The Reliance-Google deal, announced in Mumbai Wednesday by Reliance Industries Chairman and Managing Director Mukesh Ambani, makes Google the latest high-profile firm to back Reliance Jio Platforms.

As part of the strategic deal, Google and Reliance Jio Platforms will work on a customized-version of Android operating system to develop low-cost, entry-level smartphones to serve the next hundreds of millions of users, said Ambani. “These phones will support Google Play and future wireless standard 5G.”

“Together, we are excited to rethink, from the ground up, how millions of users in India can become owners of smartphones,” said Google and parent Alphabet’s India-born CEO Sundar Pichai via a video chat.

“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.”

READ: Facebook invests $5.7 billion in India’s Reliance Jio Platforms (April 22, 2020)

“Getting technology into the hand of more people is a big part of Google’s mission,”  Pichai said. “This effort will unlock new opportunities, further power the vibrant ecosystem of applications and push innovation to drive growth for the new Indian economy.”

“Google has empowered millions of Indians to access helpful information and, like Jio, is a force for change and innovation,” said Ambani. “Together, we hope to play a strong facilitative role in the transformative journey of building a new, Digital India.”

Google’s new investment is one of the rare instances where the Android-maker has joined its global rival Facebook in backing a firm. It gives Jio Platforms an equity valuation of $58 billion — the same valuation implied by Facebook.

Facebook invested $5.7 billion in Reliance Jio Platforms with over 400 million subscribers in April this year for a 9.99% stake making it its largest minority stakeholder.

READ: Jio success: Mukesh Ambani tops Forbes’ 2017 Global Game Changers List (May 17, 2017)

Jio Platforms, a subsidiary of India’s most valued firm, Reliance Industries, has raised about $20.2 billion in the past four months from 13 investors by selling about 33% stake in the firm.

Other investors including General Atlantic, Silver Lake, Qualcomm, Intel, and Vista have paid a 12.5% premium for their stake in Jio Platforms.

Reliance Jio launched a feature phone called JioPhone in 2017 that currently has an installed base of 20 per cent among India’s feature phone users.

Google’s investment in Jio platforms comes two days after Pichai announced plans to invest $10 billion for India’s digital transformation through a Google for India Digitization Fund over the next five to seven years.

READ: WhatsApp video calling sets record in India, thanks to falling data charge (May 9, 2017)

Calling this “a reflection of our confidence in the future of India and its digital economy,” Pichai said, “We’ll do this through a mix of equity investments, partnership investments, and operational, infrastructure and ecosystem investments.”

Google said it wants to work with Jio and other leaders in the local ecosystem to ensure that smartphones together with the apps and services in the Play Store – are within reach for many more Indians across the country.

“We believe the pace of Indian innovation means that the experiences we create for India can ultimately be expanded to the rest of the world,” said Sanjay Gupta, Country Head and VP, Google India.

Google opened its first Indian campuses in Bengaluru and Hyderabad in 2004.

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