New Delhi, Jul 15 (efe-epa).- Google will buy a 7.7 percent stake in the digital arm of Indian business group Reliance Industries for $4.5 billion to jointly develop an entry-level Android smartphone and make technology accessible to “millions of users” in the country, the two companies announced on Wednesday.
The investment is the latest from a United States tech giant in Jio Platforms after Facebook in April announced it was pumping $5.7 billion into Reliance’s tech subsidiary for a 9.99 percent stake in the venture.
“We are delighted to welcome Google as a strategic investor in Jio Platforms. We have signed a binding partnership and an investment agreement under which Google will invest 337 billion rupees ($4.5 billion),” Reliance Industries chairman Mukesh Ambani said at the group’s 43rd annual general meeting.
Google confirmed the deal that is subject to regulatory approvals by the authorities.
It said in a statement that it was the first investment of its $10 billion Google For India fund, aimed at boosting the digitalization of the Indian economy. The fund was announced on Monday.
“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 tech giant said.
Jio, which has many music and movie apps, runs telecom firm Jio Infocomm, which is India’s largest mobile carrier with nearly 388 million subscribers, according to the company
Google’s investment comes after its rival Facebook became the largest minority stakeholder in Jio Platforms in April by investing $5.7 billion for a 9.99 percent stake in the venture.
A total of 13 global funds and companies have now invested in the tech company, for around 33 percent of its total stake, including Abu Dhabi’s sovereign investment arms Abu Dhabi Investment Authority and Mubadala as well as Saudi Arabia’s Public Investment Fund.
On Sunday, American chipmaker Qualcomm announced a $97 million investment in Jio as part of growing interest in the Indian digital and e-commerce market among global players.
This has translated into Reliance Jio’s profile rising rapidly after it established a stronghold on the sector through cut-rate voice call and mobile data tariffs over the last few years.
Ambani, 62, the richest Indian on the planet, said that Jio’s strategic and financial investors have now committed a total of more than $20 billion in investment in the last few months.
The billionaire tycoon, who according to Forbes, runs a $88 billion (revenue) oil and gas giant Reliance Industries, also announced that Jio would soon launch trials for its 5G network in the country to enable a large number of Indians to access the high-speed internet.
“Jio has designed and developed a complete 5G solution from scratch. It will be ready for trials as soon as the 5G spectrum is available and can be ready for field deployment next year,” he said.
“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 smartphone. Google and Jio are partnering to build an Operating System that could power a value-engineered, entry-level 4G/5G smartphone. The Jio-Google partnership is determined to make India 2G-mukt (free),” the businessman said.
The stocks of Reliance, a company considered close to India’s ruling establishment and beneficiary of lowered regulatory requirements in recent years, have risen sharply since the Facebook investment was announced in April and rose further 2 percent on Tuesday after the Google deal was revealed.
Mukesh Ambani, whose business empire largely dependent on energy and oil businesses earlier, has successfully transformed the conglomerate’s profile to a digital services and e-commerce giant modeled on China’s Alibaba.
The recent string of international investments has helped boost the company stock price to nearly double since March, turning Ambani into Asia’s richest individual and the 9th richest in the world as per the Forbes real-time billionaires list on Wednesday. EFE-EPA