Facebook Takes $5.7B Stake in India’s Jio
wsj.com
wsj.com
One executive at Jio already confirmed they use DPI to monitor traffic on their networks, and their apps, be it their MyJio, JioTV, JioNews, etc. ask for almost every permission there is.
Also, it looks like the Zuck hasn't given up on his internet.org thing yet. He failed the first time, might as well join hands with a person who literally is the Government in India.
Can't switch to Idea because they were hacked by the NSA and they're about to go bankrupt, so I guess long live the Jio-Airtel duopoly!
Most ISP's worldwide do this, with varying levels of competency. Some provide the data for advertising, others use it for providing specific features/packs/traffic control.
Not excusing Jio, but I'm quite certain AirTel does this too (they had Sandvine many years ago), and other ISP's have trialed this technology in India as well.
Out of the loop: can you clarify what you mean by this?
The telecom regulator in India bent rules in favor of Jio: https://m.economictimes.com/news/economy/policy/vodafone-gro...
Rs 11,000-Crore ONGC (state owned oil and gas corp) Gas Shifted to Reliance Industries Fields: https://www.ndtv.com/business/rs-11-000-crore-ongc-gas-shift...
They literally took out full-page advertisements with Modi's image on it: https://thewire.in/economy/modi-reliance-jio-advertisement
1. Reliance Jio may not be pleased with govt's spectrum moratorium to telcos: https://www.businesstoday.in/sectors/telecom/why-reliance-ji...
2. India Trying to Stop Reliance From Selling Assets, Times Says: https://www.bloombergquint.com/business/india-trying-to-stop...
As to your second link (Dec 23, 2019), yes, the Govt. did try to stop the 20% sale to Aramco, but "Aramco officials and bankers on the deal have been working at Reliance’s offices in Mumbai" says otherwise: https://www.bloomberg.com/news/articles/2020-02-18/reliance-...
Regarding the on-going talks of selling asset, since court has already ordered Reliance to reveal assets, they just can't do away with whatever is the liability set. Indian court system is not a joke.
My original point was that Reliance or Mukesh do not rule India; yes they are clever and do lobbying as any other capitalist does but they don't control the nation or gov.
https://caravanmagazine.in/reportage/government-helping-reli...
It's the Vodafone group CEO that's accusing TRAI of favoring Jio. They had a free run charging exorbitant data prices for a good time. No wonder these accusations are coming from Vodafone.
> Rs 11,000-Crore ONGC (state owned oil and gas corp) Gas Shifted to Reliance Industries Fields
This was fought in courts and eventually an international tribunal favored Jio.
https://www.thehindubusinessline.com/news/govt-moves-delhi-h...
https://www.businesstoday.in/current/corporate/big-victory-f...
> They literally took out full-page advertisements with Modi's image on it..
What does this even mean? Even PayTm issued full page ads with Modi's image. Are they running the government too?
Jio has had some eye opening advantages-
Jio abused the stress test period for their network and essentially launched their service for free saying “join Jio, next few months free! (Fine print, this is technically a stress test.)
The way the auction for spectrum was conducted was magical- they had a front company With impressive bureaucracy wrangling power.
The stench of malfeasance is strong here.
That said fundamentally this is an issue that relates to the death of competition in the market.
Since the bungled SC auction verdict destroyed a vibrant telecom market, we’ve dropped to a triopoly- and heading fast to a duopoly.
What is sad is that the previous governments had done a truly impressive job of threading the economic needle when it came to designing a telecom market with competition.
Indian telecom was a boon to its impoverished customer base. Now it’s becoming a cabal.
I beg to differ. I do understand Jio was quite aggressive in expanding its services and TRAI should have been more vigilant. But that still doesn't prove that they were working together in order to establish a monopoly. The pre-Jio telecom market was good for the telecom companies but it was horrible for the end consumers. The data prices were simply too high.
The reason why I say this is because it’s VERY easy for the market structure to get flubbed and become only 2 or 3 firms which “compete”. (See america- invented the Internet, didn’t get the market right.)
India has some of the lowest, if not the lowest ARPUs in the world. The Indian telecom sector invented the 0 cost phone call (you give a missed call to a phone number, people call you back with offers)
Market structure is so important - you see it how the nascent Value added services market was destroyed by Indian telcos.
Back in the day one new area of innovation was VAS- but telcos were able to dictate the profit spread to VAS firms once they realized VAS was profitable. This killed the industry.
Telecoms tend towards rent seeking behavior (American telecoms say “this is the best service we can provide”, until google fibre turns up and magically those fibre installations get executed)
Data prices being high ignores the cost of calls and of infra issues the telcos were facing.
The spectrum auctions and the subsequent Supreme Court verdict destroyed our market - and there just isn’t the kind of market and economic acumen+Political power mix which will fix the market.
Maybe yes. But my previous point stands. What good is the sector when millions of Indians can't afford it? (from the perspective of data rates). Also the incumbents had all the time in the world to normalize data rates. But instead they chose to cartelize the industry and kept their profits up.
https://www.cable.co.uk/mobiles/worldwide-data-pricing/
https://www.forbes.com/sites/niallmccarthy/2019/03/05/the-co...
So they didn't cartelize, and only recently after the insane noise over the 3g auction which fizzled out, did we lose that market.
We've now essentially cartelized (all remaining firms raised rates in tandem), and the few players left are also teetering with Vodafone considering leaving.
This means that we will likely see Jio, and Airtel left, with BSNL constantly being denuded.
Their profits are terrible, and the debt burden because of arrears means they need a rescue, or the future situation will become - impressively - even worse.
https://www.outlookindia.com/website/story/kya-congress-muke...
He is not Warren Buffett type of billionaire, that is for sure.
The reason reliance gets shit though is not because of corruption - Reliance is fundamentally a predatory firm.
Few years back there was this 'news' that Mukesh Amabani's son had killed 2 person in a car accident. Now you can't find any link in any major news website
https://thewire.in/business/anant-ambani-memes-reliance-indu...
You have followed US policy making, lobbying and stuff like how a coccus of ultra rich people/execs are actually running the Govt from behind the curtain and all that. So when you read all that that usually means the groups do that to different parties i.e maybe one group does that to the republicans and another to the democrats.
(Now enter India)
This guy alone pretty much controls the Govt of India and its decisions irrespective of the party, more so with this current right wing Govt (they are like family).
If you read a bit, there are Govt decisions that look like this:
Let's say there are couple of shops in a village. One of those is billionaire's shop. This is a very famous village market among neighbouring villages. Business is good, especially at night (some famous fair/shrine or whatever). There's the huge high central light in the village square - this is the only light that keeps the market area lit. Now the village head decides he needs to shift the light to a better location so that it will be used even better, especially for the nightly shopping. Fair. Great idea! So he makes a declaration that the village assembly has taken an unanimous decision to move the light to the inside of billionaire's shop so that it is better for the villagers and all the shop keepers in the village. And the best part is the villagers cheer this decision and run after anyone who even has a doubt about this decision let alone an objection.
However if the next time this right wing Govt loses (which seems highly unlikely the way this party/Govt has consolidated power) he might be in trouble but I doubt that would be something he can't handle or hasn't handled before.
At best he hinted that Ambani is closer to Modi which is not that unexpected. Of course, no government has ever been 'unfriendly' to Ambani. They are all benefiting from one another.
They were offered the 4G spectrum at 2016 prices but even then they couldn't pay their employees' salaries anymore so the Govt. had to step in to pay for their voluntary retirement scheme, which 78,000/50% of their employees opted for.
Under the terms of the original Rafale deal[1], HAL was supposed to manufacture/assemble Rafale aircraft in India. This deal never materialized.
A new deal was made under whose terms, Dassault and others were to supply 36 Rafale aircraft in fly-away condition in return to which, they were to invest 50% of the cost of the deal (or about €3.9 billion) back in India, under an offset clause.
Of this €3.9 billion, €100 million was awarded [2] to Dassault Reliance Aviation limited as an offset contract to manufacture components for a passenger aircraft (Dassault Falcon 2000). This was a decision by Dassault, not the Government of India.
There were about 30 offset partners among which Reliance was one. This contract was worth about 3% of the entire investment under the offset clause.
So Reliance was not "chosen over" HAL.
Because the Indian govt. forced Dassault to deal with Ambani. We know this because the French President literally said so.
“We did not have a say in this,” Mediapart quoted Mr Hollande saying. “It was the Indian government that proposed this service group, and Dassault negotiated with Ambani. We did not have a choice. We took the interlocutor that was given to us.”
https://m.economictimes.com/news/politics-and-nation/india-p...
https://www.ft.com/content/4e95c46c-bdb6-11e8-94b2-17176fbf9...
https://www.ndtv.com/india-news/rafale-deal-anil-ambanis-fir...
> The Anil Ambani (who has since declared bankruptcy) company had zero experience in defence or aeronautics
The company that you are talking about came into existence after Anil Ambani got stake in Pipavav Defense who already had experience working with Indian navy[1]. Anil Ambani's company has also signed an agreement with US Navy to repair their seventh fleet vessels[2].
1. https://economictimes.indiatimes.com/news/defence/pipavav-de...
2. https://www.livemint.com/Industry/VZqdl90t3NiQZHl7ccylwK/Rel...
No wonder the Supreme Court threw all these allegations right into the bin.
"Chosen". As in forced to chose by the Indian govt. We know this because the French President literally said so in an interview.
“We did not have a say in this,” Mediapart quoted Mr Hollande saying. “It was the Indian government that proposed this service group, and Dassault negotiated with Ambani. We did not have a choice. We took the interlocutor that was given to us.”
https://economictimes.indiatimes.com/news/politics-and-natio...
https://www.ft.com/content/4e95c46c-bdb6-11e8-94b2-17176fbf9...
https://akm-img-a-in.tosshub.com/indiatoday/images/bodyedito...
> “We did not have a say in this,”
French government said that there was no pressure on them. In such an important matter, I am more likely to believe the government than a news agency I have never heard of.
https://www.livemint.com/news/india/rafale-deal-france-says-...
And consumers and TRAI were giving Jio clueless looks or even cheering them.
https://economictimes.indiatimes.com/news/elections/lok-sabh...
They are frenemies at best and outright competitors. FB gets to deploy its cash hoard into a relatively safe and perhaps lucrative investment and buy some insurance to being treated fairly on Jio's platform.
I am struggling to understand what exactly is the problem and why is Jio a danger? Because in the future they might become some unknown danger to morals and economic well being of Indians/humanity. Crush freedom in some inexplicable way that you cannot imagine but are sure they will. I am genuinely curious.
I can't satisfy your curiosity because I too also sincerely don't know what flavor of undesirable behavior a monopoly creates but that they create bad behavior is as intuitive to me as is breathing to anyone else.
A first person anecodote which doesn't necessarily further my point but still - I had Jio fiber installed for a relative, I was visiting in a small north Indian town - unbelievable price, offering, everything great. But it took me 3 days of multiple hours on the phone, and I still couldn't access Hackernews, or reddit or even New York Times. Pages for these and quite a few other sites just wouldn't load. The first canned response - 'Reliance only blocks what the Govt. has told it to block' (paraphrasing). I didn't anymore have the energy to analyze if it was a technical problem, casual censorship or just customer service issues because of fast scaling.
The only thing worse than a monopoly is the non existence of the particular service.
Before Jio, reasonable speed Internet was non existent in rural India. The plans were priced so high that using Opera Mini with cloud compression was a reasonable decision, to save on data cost. I used to switch off 3G to ensure data doesn't get all consumed.
> But it took me 3 days of multiple hours on the phone, and I still couldn't access Hackernews, or reddit or even New York Times.
What do you mean by "not load"? Are you sure this was not something unrelated to Jio?
You seem to be saying there is none so they are a defacto monopoly. And they have a substandard offering so they should not be allowed to offer one.
I appreciate the enthusiasm for privacy and all, however the priorities for Indian citizens is having a cheap, reliable internet service that becomes a backbone of the modern economy.
Now i am not defending any business practices here, however you will be hard pressed to find something as succesful anywhere else in the world which is not politicized with currying of influence and favors. That is essentially the nature of an industry which has become a utility.
People are free to educate themselves and use alternatives based on their understanding.
Indian telecom had one terrible moment which ended a near dream run for consumers.
Prior to the SC auction verdict we had a huge amount of competition.
Getting telecom market structure right is a hard thing to do, because there are always people working hard to pervert the system.
America has an auction where famously, telcos his the PIN codes for the areas they wanted in the auction bids.
This verdict ensured that many firms pulled out and significant market consolidation took place, till we went from a multitude of firms to 3 + BSNl.
At the point you have three firms, you have cartel behavior.
Then came yet another SC verdict which was devastating (arrears due to the govts was based on total profits, not just on spectrum related profits.)
This is why they were asking for help.
And finally Jio. Jio is doing a perfect job competing in its full throated style to end at least one of the debt burdened and teetering competition.
Sadly they also oppose net neutrality, and have had some amazing shenanigans ignored entirely by the regulator.
It’s not a good time for Indian telecom consumers.
Write for yourself. Jio has destroyed the cartel that ensured high mobile prices for a long time in the country. It's because of their efforts that millions of Indians are connected to the Internet today and could only dream about it a decade back.
There's a lot going on in the world right now, but I wanted to share an update on our work in India. Facebook is teaming up with Jio Platforms -- we're making a financial investment, and more than that, we're committing to work together on some major projects that will open up commerce opportunities for people across India.
India is home to the largest communities on Facebook and WhatsApp, and a lot of talented entrepreneurs. The country is in the middle of a major digital transformation and organizations like Jio have played a big part in getting hundreds of millions of Indian people and small businesses online.
This is especially important right now, because small businesses are the core of every economy and they need our support. India has more than 60 million small businesses and millions of people rely on them for jobs. With communities around the world in lockdown, many of these entrepreneurs need digital tools they can rely on to find and communicate with customers and grow their businesses. This is something we can help with -- and that's why we're partnering with Jio to help people and businesses in India create new opportunities.
I want to thank Mukesh Ambani and the entire Jio team for their partnership. We're looking forward to getting started.
But saying all investment (special reference to China ones) is good, is taking it too far. It is already proven that China is new financial colonist [1] [2], infact last week India Govt passed a notice that any investment from China would be scrutinised.[3]
[1] https://www.ft.com/content/186743b8-bb25-11e8-94b2-17176fbf9...
[2] https://www.forbes.com/sites/panosmourdoukoutas/2018/08/04/c...
[3] https://economictimes.indiatimes.com/news/economy/policy/ind...
Russia/Austrlia/Malaysia and Thailand have free trade agreement with China and they've not been colonised yet.
India is a big enough power to negotiate better deals with China.
So the fear of china is unwarranted.
Furthermore, there is a paper by Indian institute of foreign trade where the assert that imposition of trade barriers on china has reduced GMV of India.
What best you can do now is to partner with china and bring them into your market, learn tricks and techniques of manufacturing and become a global leader.
There was no reason why India could not create its home grown TikTok, WhatsApp , Twitter etc.
??? Really how much do you get paid to shill that hard
If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and sticking to the rules when posting here, we'd be grateful.
Being poor doesn't mean a person doesn't have principles, just like being wealthy isn't correlated with having strong principles or morals.
That seems to be saying that despite having less, the poor are exercising a far more principled life.
They are saying poverty forces people, against their will, to break their moral codes and principles. It’s one of the worst things about the power dynamics of money: not being able to afford an iPhone is a laughably trivial concern compared to having to work instead of spending time with your children, when you know how much of an impact your absence will have on them, for example.
I was glad to read it as a pithy and sobering comment, even if I didn’t agree with the rest of the post.
Google, on the other hand, rolled out Google Pay (Previously Tez) based on UPI platform by teaming up with major banks. Its really popular these days.
Previously Softbank was the largest because of its $2.5B investment in Flipkart (which was India's answer to Amazon.. last year Walmart bought it and Softbank had a successful exit).
>I am okay with small startups getting investment They can also be worst. During the period April 2015-March 2020, of the 30 Indian unicorns (companies with over $1 billion valuation), 18 were funded by Chinese companies and we all know how much china firms is controlled by their government.
What India required is: 1. Company themselves don't sellout morality for money. 2. Regulators keep a close eyes. 3. Indian citizen too make their voice heard on wrong things.
What india needs is to invest in their own businesses and stop using imported goods just because they are cheap. They are cheap because their countries invested in infrastructure to make it possible while indian government continues to raise taxes on imported goods while doing nothing about the abysmal lack of infra and good education. It hinders those who need imported stuff because it's not available in india. The regulation is a joke too. We don't need more regulations than we already have. We need less but have them more strictly enforced and accessible so people can actually see stuff rather than hearing it from a lawyer who isn't updated on the issue themself
Reliance Jio is focusing on vertical integration by even building and rolling out their own 5G tech (https://content.techgig.com/jio-develops-in-house-5g-tech-ai...). And I am sure they plan to expand to other countries in 5 years or so. It will be very interesting to watch how they change the telecom industry in these countries too, in the future.
Speculating because I don't know the details, but feels like Facebook got the better end of the deal - FB bought WhatsApp, a messaging platform, for $19 billion. $5.7 Billion for 10% stake in one of the largest mobile network in the world sounds a real bargain ... right?
explain?
- Then they offered services for very LOW prices.
- Once the competitors were driven out, they've RAISED prices. And are now lobbying with the government to reduce inter-connection charges and to stop "Free" calls which their remaining competitors are still offering.
- They are also extremely INVASIVE in collecting data on you through their services, apps, and even deep packet inspection of your secure connections. They are also suspected of creating shadow profiles and trying to link it to real profiles by data from their other businesses (e.g. Reliance Retail stores) and also through data they purchase from data brokers.
- They lobbied AGAINST NET-NEUTRALITY and tried to offer Facebook services for free, but luckily for us failed.
- I can bet that Facebook and Jio will now SHARE DATA and use each others service more. Goodbye privacy. For ever.
Even if Jio raised prices a little higher than they ever were, it doesn't therefore follow that the indian consumer is worse off for having the new player. And vodafone and others didn't leave the indian market. Jio isn't the only player in India. They'll always have competition that keeps them from raising prices to confiscatory rates.
What exactly was holding back the hands of the entrenched players when they charged INR 10 per MB of data?
India had some of the cheapest plans in the world, and the indian telecom market is famous for having the lowest if not among the lowest ARPU rates in the world.
Do you have a source or reference point for this?
2017 figures and 2019 figures are significantly different if you are poor, however that doesn't mean that prices were high.
And there isn't anything like a free lunch - Reliance has achieved these costs through a variety of means, both legal and supra legal.
Their "creative" ways to abuse the network testing period for example (and the non response from the regulator), their use and harvesting of private data to inform other parts of their empire and their efforts to take over the market bode ill for India.
Remember that Net neutrality was won because we got lucky and there was enough political capital for people like Nilekani to also advocate for it through the government machinery.
However when NN 3.0 happens, Reliance will not let it pass.
With a market without competition, they will succeed - since they have to spend less effort competing and can afford their lobbying.
This is really bad for democracy.
JIO is deeply embedded into the rural populace. Exactly the ones who are vulnerable to disinformation campaigns.
And facebook just bought a key to the gates.
> JIO is deeply embedded into the rural populace. Exactly the ones who are vulnerable to disinformation campaigns.
This deeply concerns me as it will have unwanted consequences.
This is more of a commerce play, nothing to do with disinformation dissemination.
Lets say it violates free speech laws and is liable to be sued and the one who sues is sure to win.
Lets say he sues and wins.
It still doesn't matter. Rumor about the lawsuit and the falsehood of the original content is already old news. And is not as quickly spreading as the original rumor.
The perpetrators of the original rumor win the war to influence, in-spite of free speech protections.
Free speech protections and laws mean nothing and are toothless in face of modern mass media tech.
Compare it to the old days, of the news being said on TV or Radio or in a Newspaper. They too can spread wild rumors but have definite and impactful backlash.
That negative feedback mechanism is lacking in platforms like FB and Whatsapp.
I have seen few people getting beaten up badly and two dying due to mob killing them with law enforcement involved for speaking against "religious stuff" and a politician.
Just a recent thing that got some attention - https://twitter.com/ShefVaidya/status/1251818372343439361?s=...
But I assure you, this happens way more in small towns and villages.
If mob gets triggered by you criticising their cows or government (idk why blind patriotism is so widespread here), what would you do about your free speech if you get killed in the process with no enforcement against those who killed you or imagine a family member?
Honestly I am confused about free speech as well. Is the argument that government didn't stop you from criticising itself, just that the mob happens to kill you for it in public in the presence of the government make sense? Is that free speech?
Also the freedom of speech guarantees are very watered down in comparison with the USA.
Indian government itself participates in disinformation campaigns, denies statistics coming from the outside (given india has done nothing on that front and only cut funding), practice blatant discrimination and spreads religious nonsense.
[0] https://internetshutdowns.in/
Oh and the nice bill - https://en.m.wikipedia.org/wiki/Personal_Data_Protection_Bil...
Even I agree, there is too much worship of capitalist and free market structures.
There ought to be a good balance between free market and govt. regulations, where public interests in protected.
Then there are those who suddenly talk like free market capitalists when it's convenient to their politics. I see this all the time with whomever the balance of power is favoring. 15 years ago, it was conservatives who excused private companies that did things that liberals didn't like, as long as those companies appeared to align with their values or were at least agnostic, and now you'll hear liberals who otherwise hate capitalism pull out the "private company" card when it suits their goals or is an affront to the other side.
I believe very few people are actually interested in the public good. Everyone claims they want to do things for the public good. In reality, I think they all want whatever goodies they think they can get by acting as toadies for their party of choice.
There ought to be a balance between freedom and regulation, but this is increasingly becoming a minority opinion.
Currently WhatsApp pay is facing a lot of resistance in large scale roll out. Watch that go away in a matter of weeks.
Inequality is a great thing and it works pretty good for ad networks as well as social media. The population hops to the cheapest solution while locking in the others with them due to the network effect.
Keep it it mind that a single dollar can buy cooked meal for two persons, or major ingredients like flour rice potato etc for 3-4 persons.
Obviously not everybody is so poor in India, but World Bank defines lower middle class household as somebody earning $10-50 a day [1].
Personally, I had used Jio Sim cards, prepaid, in data dongle, but never installed any of their apps because never felt like I needed. And yes, the reason was exactly you described, best rates, about $5 for a month, for 3GB daily.
Jio is also memed as Oil (Mirror image of Jio), because Data is the New Oil.
[1]. https://en.m.wikipedia.org/wiki/Income_in_India#cite_note-7
This is as much a political statement as a financial one.
Source please? Why should i believe a new poster with such randomly typed username?