Construct of FB-Jio deal does not mean that two sides will not compete in the market: Facebook

New Delhi: Facebook and Jio will look to drive synergies and areas of collaboration but the mega-deal does not mean that the two sides will not compete in the market, officials said on Wednesday. “The construct of this collaboration is not meant to be exclusive,” Ajit Mohan, vice-president and managing director of Facebook India, told reporters via a concall after the US-based social media giant announced an investment of Rs 43,574 crore to buy a 9.99 percent stake in Jio Platforms. The two sides “genuinely believe” there are exciting opportunities to work together and broaden the avenue for economic expansion, with first focus on small businesses, Mohan said. [caption id=“attachment_8288711” align=“alignleft” width=“380”] Representational image. News18.[/caption] To a query on whether Facebook could also look at other partnerships on the retail side with companies, say, Amazon or Flipkart, Mohan said, “The platforms remain open… it is non-exclusive and it is not meant to keep anyone away.” Elaborating on the deal, Anshuman Thakur, head of strategy, Reliance Jio, said, “At this point, we have identified merchant, SME (small and medium enterprise) commerce as something we can collaborate and we can benefit from what WhatApp already does very well… We will similarly find areas where the skill sets may be more complementary but this investment or partnership does not mean that we will not compete in the market.” He added, “There will be things where we will be directly competing with each other also in the market, the entities are independent of each other in every respect.” The deal does not, in any way, amend or change business models for the companies, he said. “We have our suite of products and services, the same way that Facebook has its own suite of products and services and we are going to make the best use for our respective companies,” Thakur added. Facebook will get a seat on board on Jio Platform Ltd, the company it is investing in, along with an observer seat. Once the investment comes in, Rs 15,000 crore will be retained in Jio Platforms Ltd while the rest will be used to redeem OCPS (optionally convertible preference shares) of Reliance Industries Ltd. “In that sense, the entire amount does go to reduce debt of the Group… Jio Platforms Ltd has been valued at an enterprise value of Rs 4.62 lakh crore. The debt in the company is around Rs 40,000 crore. With this investment, Rs 15000 crore will be retained in the company and balance will be used to redeem OCPS investments of RIL in this company,” he said. The net debt of Jio Platforms will correspondingly reduce because of cash which is retained in the company, he pointed out. (Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Firstpost)