Facebook said it is investing $ 5.7 billion (£ 4.6 billion) in the low-priced mobile Indian company Reliance Jio, owned by the wealthiest person in the country, Mukesh Ambani.
The agreement makes the social network the largest minority shareholder in the telecommunications unit of Reliance Industries, with a share of 9.99%.
It gives Facebook an important foothold in India, where its WhatsApp chat service has 400 million users and is about to launch a payment service.
“This investment underscores our commitment to India and our excitement over the dramatic transformation that Jio has spurred in the country,” Facebook said in a statement.
Facebook also said it wanted to focus on the collaboration between WhatsApp and Reliance’s e-commerce firm JioMart to allow people to connect with companies, shops and buy products.
In February of this year, WhatsApp Pay was authorized by the Indian authorities to launch a gradual launch, two years after the start of a trial version of the service.
In a separate statement, Reliance Jio said that the agreement will be positive for both the company and the country as a whole: “This partnership will accelerate the all-round development of India, meeting the needs of the Indian people and the economy. Indiana”.
Since its launch in 2016, Jio has attracted around 370 million subscribers to its service. That rapid growth has seen the company borrow large amounts of money and the deal with Facebook will help it complete its plan to reduce its net debt to zero by March next year.
India is seen as a key market for the growth of Facebook and its WhatsApp messaging platform. The number of Internet users in the world’s largest democracy will grow to around 850 million in 2022, according to consultancy firm PwC.
The move marks a further link between the Indian telecommunication platform and US tech giants. Last year Microsoft last year announced plans to partner with Jio to offer cloud computing to businesses.
The agreements come when the Indian market has become increasingly difficult for American companies to reach, as the government has imposed new restrictions on foreign companies operating there.