Facebook News: Deal With India's Reliance Jio Delayed By Coronavirus Pandemic

Negotiations reportedly stalled Tuesday on Facebook’s plans to buy a multibillion-dollar stake in India’s Reliance Jio to expand in the country’s digital market because of coronavirus travel bans.

Reliance Jio, owned by Mukesh Ambani and valued at $60 billion, began operations in 2016 as a cellphone communications company and has since expanded into home broadband and e-commerce, competing successfully against U.S. tech giants in the Indian market.

The company has stepped up amid the coronavirus pandemic, doubling its data limits and offering free talk minutes on non-Jio networks. It also offered free broadband plans to support telecommuting as a result of the outbreak. India so far has reported 519 confirmed cases, along with 10 deaths.

A preliminary agreement giving Facebook (F) a 10% stake had been nearly ready for signing, the Financial Times reported, quoting sources. The deal had been expected to be signed later this month before the beginning of India’s new fiscal year. The two companies have collaborated in the past, most notably on a digital literacy project last year.

Google also is reported negotiating with the firm. Microsoft and Jio are working on a cloud computing project for gamers that is expected to go live this year and already have set up cloud computing for several businesses.

Facebook has a strong presence in India with more users there than in any other single country, some 260 million. Its WhatsApp messaging platform boasts 400 million users.

PwC predicts the number of internet users in India will nearly double by 2022 to 850 million from 450 million in 2017. It is the second-largest smartphone market behind China.

India is making it more difficult for U.S. tech firms to operate there, proposing a Personal Data Protection Bill, which would require tech firms to get a person’s consent before collecting and processing personal data. The measure, which is still being studied by lawmakers, also requires companies to hand over nonpersonal data to the government. Facebook ran into trouble with the government four years ago by offering a Free Basics app, which prompted accusations of “digital colonialism.”

Reliance had hoped the deal with Facebook would allow it to eliminate debt by next March. It also planned to sell off its 20% stake in Saudi Aramco to reach that goal, the Times said.

Jio reportedly has 370 million cellphone subscribers. Reliance said last year it would spin off Jio to attract new investors.