Reliance Jiofor $5.7 billion (Rs 43,574 crore).
- The deal is expected to give Facebook a stronger foothold in India, which is seen as its largest market.
Arnab Mitra, Managing Director, Liqvd Asiatries to decode the meaning of the deal and its future implications.
Dig a little deeper and you'll know that Facebook has not been making as much money in Asia as in other markets; it’s banned in China and its largest user base resides in India (260mn+). Therefore, it makes sense for the company to try and grow within the country and get a stronger hold in its root to get more revenue. And the company’s new partnership could change that for them.
While both Facebook and Reliance Jio are trying to peg the initiative as entirely philanthropic, maybe as consumers, we will need to take the news with a little pinch of salt. All said and done, Rs 44,000 crore is a little too much of an investment by anybody to try to increase its ARPU, to match their revenues simply to any other advanced market with a lot less user base.
Facebook has globally restructured and enabled various features across the platforms it owns, that shows the progression the company has in mind, keeping the users closed within its environment.
But is that all there is to this? Does everything end here? Maybe not. If we dig further, we will know that this is not Facebook’s first foray into the Indian market. Several years ago, it tried to offer free internet connectivity to Indian users in a program called Free Basics. But that initiative hit several snags until it was banned in the country in 2016. A lot of activists voiced their protest along with millions of Indians signing the petition to push regulators to decide that companies could not offer free internet services that favoured some companies over others. Jio, with its feature phone, will also help Facebook influence rural India digitally.
More recently, Facebook has also been at loggerheads with the Indian government over WhatsApp. The government has demanded that WhatsApp change its encryption to trace messages back to their source, which WhatsApp has refused to do. At the same time, regulators have repeatedly stalled WhatsApp’s request to offer a payments service to its Indian users. With Jio payments bank already live and backed by the country's largest bank, it’s an easy gateway for WhatsApp payment as a UPI for the bank, that’s the obvious next play for an organization fighting for permission for the longest time.
But through this deal with Reliance Jio, Facebook will probably be probably be able to bypass those government directives easily and make this move an intra-company decision that doesn’t need government approvals as the undertone is still about helping millions of Indians shop better. What it smartly covers up is how this will make the government relax its regulations owing to its relationship with the Indian giant.
And all of this will hurt other online players across categories badly, making Reliance Jio the only formidable player standing tall in a market where nobody else is allowed to play anymore. And we all know what that does to consumers at the end of the day. They are not left with choices and finally have to bear the price of a monopolistic market. Pretty much like our current government situation and choice of PMO. We don’t really have another formidable opponent to challenge the current one and so we can’t even compare whether we need this one or there are some better options outside.
Now that’s a mistake that has already happened. The question is, would you like to make the same mistake twice over? If the answer to that is no, then here are my suggestions for you –
- Slowly start identifying another chatting app like WhatsApp. Start moving some of your conversations there. Build WhatsApp redundancy in your own network and life. For example - How about Line? Do you know Indonesians and Singaporeans love it? Don’t wait for a day where you are charged to use WhatsApp on your Jio connection or watch the video first before responding to your family.
- Don’t always give into convenience. I didn’t connect Google Pay to my gmail inbox, and I am surviving just fine. Google has a lot of information about me – my payments, purchases aren’t something it has any visibility on. So you do the same too. Let WhatsApp come up with a WhatsApp Pay – you continue to use your banking UPI or something else. Don’t let them join the dots.
- Try not to buy your mobile phone and sim-card from the same company. Keep an alternate number from a competition TSP. Spend just the lowest billing amount. But keep them in the business by keeping your second number on.
- Don’t believe in a philanthropic approach by anybody who takes your data as a return gift. Remember, data is the new fuel (and clearly more expensive) and as long as you have your data secured and protected, you are of some importance to the biggest of the companies. With data being collected across platforms from e-commerce (Ajio), your entertainment (Saavn & Jio TV) to a simple chat with a friend, there will be nothing much left for you to guard.
- Consumerism is here to stay. But one can’t say that about loyalty. Remember that not everybody deserves your loyalty and maybe your politician, chat apps and payment UPIs are some of the examples of the same.
Hence, the Facebook share purchase is much more than an initiative to help small businesses, it’s an invasion of all your digital footprint on the heavily used cross functional platforms owned by the two giants. But don’t you think that’s too much to give to one company and as a result, kill competition completely? I conclude this article with this question and a thought -
“There is a difference in the way you feel the moment you stop calling your representatives 'Political Leaders'; Start calling them 'politicians' and immediately you will know that there is no reason for you to be loyal to any of them. Same with your TSP, Chat apps, social networks, UPIs – You use them, Do not let them use you. Or your data in this case. The moment you see two of them getting questionably close – have your senses fired up. Look for a new muse.”
Disclaimer: The opinions expressed in this column are those of the author. They do not purport to reflect the opinions or views of Advertising & Media Insider.