How Jio and Facebook could work together to make inroads into India’s Internet

  • Reliance Jio is among the few big Indian companies that has shown interest in consumer VR, while Facebook owns Oculus
  • Facebook has been pushing the Watch platform here in India, Jio has a set user base on the JioMovies platform

Prasid Banerjee
Updated22 Apr 2020, 10:34 PM IST
A man walks past a Reliance Jio signage in front of a closed shop in Hyderabad.
A man walks past a Reliance Jio signage in front of a closed shop in Hyderabad.(AP)

Social networking giant, Facebook Inc, has bought a 9.99% stake in India’s Reliance Jio, which gives both companies an opportunity to make key inroads into India’s Internet landscape. As a result of the partnership, Reliance Retail will use WhatsApp to get more customers onto its grocery delivery platform JioMart, but that’s certainly not the only way these two companies could work together.

Here’s a look at various products that Jio and Facebook already have, which could be mutually beneficial for each other.

Mobile Gaming

India’s mobile gaming landscape has been on fire since Reliance Jio’s entry into the telecom space. Cheap data costs and easier access to the Internet allowed developers to reach more gamers. According to many developers, Jio is hugely instrumental in India’s changing mobile gaming landscape, whereas Facebook is more of a been-there phenomenon.

Keerti Singh, vice president of growth at Hitwicket, said Facebook’s Gamerooms was popular among developers a few years ago. The platform had lots of new games and the players to play those games, but couldn’t keep up with the times.

On the other hand, a recent New York Times report said the social network has been testing a new Facebook Gaming app. This is more like a game streaming platform like Microsoft’s Twitch or Google’s YouTube Gaming. Such a platform could benefit from Jio’s efforts to bring low-latency gaming on its fiber network. If the Indian telco can convince gamers to be on its network, it could then use these gamers to increase the amount of content available on Facebook Gaming. Microsoft can do this through its Xbox gaming consoles, while Google recently announced the Stadia gaming platform.

Virtual Reality (VR)

Reliance Jio is among the few big Indian companies that has shown interest in consumer VR. On the other hand, Facebook owns Oculus, which was amongst the first companies to make consumer VR headsets.

Jio already bundles its mixed reality platform — which includes both virtual and augmented reality (AR) experiences — with its broadband service. It could bundle Oculus into this to improve the value proposition.

Video Streaming

Gaming and game streaming aside, both companies also have their own video streaming platforms. While Facebook has been pushing the Watch platform here in India, Jio already has a set user base on the JioMovies platform — since it’s available to Jio subscribers for free. Each platform could enhance the offerings on the other. Facebook recently streamed the Auto Expo event on Watch and it has a lot of user-generated content, which Jio doesn’t have access to. On the other hand, Jio already has relationships in place to get movie content on its platform.

India’s video streaming market is expected to grow to 488 million viewers by 2022 from 378 million in 2019, according to a report by the Federation of International Chambers of Commerce and Industry (FICCI) and EY. Facebook and Jio could use their partnership to capitalise on this growth.

Payments

Both Facebook and Jio have shown interest in being involved in the payments space. While Jio has the JioMoney application, Facebook allows people to make payments through Messenger in the US and WhatsApp is now a UPI-based payments application in India. However, Facebook has a third digital payments endeavour in the works too — the Libra cryptocurrency service.

It’s probably too early to say that the company could use this service to bring Libra to India someday, but one wonders whether Jio will soon be an addition to the Libra Association.

Hemanth Kumar, former CIO of Unocoin and co-founder of blockchain-based platform Mints, said the deal could be a “step further for experimenting crypto-based payments on a large scale”, and India could be a “fantastic testing ground” for that.

Darshan Bathija, CEO of Bank of Hodlers, said building interoperability between Libra and UPI is one way for Facebook to bring the service here. “The massive and unserved distribution Jio brings with the next billion users coupled with the existing penetration of WhatsApp in India will make Libra the winner of payments for the Indian subcontinent, by a long shot,” he added.

The elephant in the room

Facebook’s infamous Free Basics platform was shut down by the Telecom Regulatory Authority of India (Trai) due to net neutrality concerns. Under Free Basics, the social network wanted to provide free access to certain services to a certain segment of Internet users. At the time, Facebook launched the service through a tie-up with Anil Ambani’s Reliance Communications. Could Facebook use Jio to create a similar service or app?

This may be more of conjecture than reality though. Apar Gupta, executive director privacy advocacy group Internet Freedom Foundation (IFF), said the regulatory framework is “pretty clear” on this front, which makes the revival of something like Free Basics unlikely. At the moment, telcos like Jio can provide free access to their streaming apps etc, but they cannot forego users’ data usage for the same. So, Jio may be able to allow free access to Facebook’s apps etc. but it won’t be able to provide data usage free access to it.

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First Published:22 Apr 2020, 10:34 PM IST
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