Why rivals Google and FB have converged on Jio

Thomas K Thomas | | Updated on: Dec 06, 2021

For the first time ever, technology rivals Google and Facebook are now strategic partners in one company — Jio Platforms. Both Facebook and Google have been seeing India as a big market and trying on their own to reach the entire billion people in the country. But, so far, both have had limited success due to regulatory headwinds and tough market conditions where pricing of services is critical.

India’s Internet market is about to explode exponentially. Broadband user base in India has crossed 500 million and Indians are using more data than ever before — 4GB on an average every month, projected to grow to 11GB per month in the next four years. India is clearly one of the biggest markets for any global digital company. And Jio is at the centre of it. Google on Tuesday announced $10-billion investment into India, and this clearly indicates its intentions to be a significant player here. But will this clash with Facebook’s ambitions?

This is where Ambani has built partnerships in a way that each investor brings something unique to the Jio ecosystem. The partnership with Google is aimed at building affordable devices, tapping into the developer ecosystem on Android and software play. Jio’s partnership with Facebook, on the other hand, is more about connecting with small businesses, building consumer community on social media and using WhatsApp reach to connect with small businesses.

However, analysts have cautioned against control of data with large players coming together.

“The partnership between Google and Jio when assessed more broadly alongside other investors and partners like Facebook and Microsoft is a reminder that since these companies also compete in many areas including video conferencing they will need to tread rather carefully. Also, given all these players are also market leaders, they can potentially and collectively dominate the digital market which can mean a certain section of population rightfully also having concerns with data collection and monetisation practices. This is an area that will need much focus and effort on Jio’s part to ensure it can deal with such concerns,” said Sanchit Vir Gogia, Founder & CEO at Greyhound Research.

Published on July 15, 2020
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