What Facebook and Jio working together means for Internet in India

Facebook buying a 9.99% stake in Reliance Jio platforms gives both the companies a chance to make inroads into the Indian Internet domain.

Facebook buying a 9.99% stake in Reliance Jio platforms gives both the companies a chance to make inroads into the Indian Internet domain. (Hindustan Times)

Facebook buying a 9.99% stake in Reliance Jio platforms gives both the companies a chance to make inroads into the Indian Internet domain. Reliance Retail will get to use WhatsApp to get more customers onto JioMart, its grocery delivery platform for starters, but there are more things that this partnership can facilitate.

Mobile gaming

Mobile gaming in India has been on a high since Reliance Jio's entry into the telecom space that brought in cheap data and easier access to the internet. This also allowed developers to reach more gamers. In fact, many developers feel that Jio is instrumental in changing the mobile gaming landscape in the country.

Facebook's Gamerooms was popular amongst developers till a few years ago. The platform had a lot of games but it could not get very popular. Add Facebook's recent Gaming app to this. Facebook Gaming is similar to Microsoft's Twitch and Google's YouTube Gaming - a streaming platform. One that could benefit off Jio bringing in low-latency gaming on its fiber network.

If Jio can convince gamers to be on its network, it can then use these gamers to increase Facebook Gaming content. Microsoft is doing this through the Xbox gaming console and Google through the Stadia gaming platform.

Virtual Reality (VR)

Reliance Jio is one of the few Indian bigwigs that has shown any interest in consumer VR. Facebook owns Oculus which is one of the first companies to make consumer VR headsets.

Jio already bundles its mixed-reality platform, virtual and augmented reality (AR) experiences both, with its broadband service. Post this partnership, it could bundle Oculus along with this to improve the value proposition.

Video streaming

Both Reliance Jio and Facebook have their own video streaming platforms. Jio already has a user base in India for JioMovies (since it is free for Jio subscribers) and Facebook has been pushing the Facebook Watch platform here. Both Facebook Watch and JioMovies can enhance what the other has to offer.

Facebook Watch has a lot of user-generated content that Jio does not have access to and Jio already has contacts place to get movies onto the platform.

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

Payments

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

While Jio may not involve itself in the cryptocurrency scene any time soon, but one can wonder if it will ever be a part of the Libra Association in the future.

Hemanth Kumar, former CIO of Unocoin and co-founder of blockchain-based platform Mints, told Mint that 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.

Speaking to Mint, 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," Bathija added.

However…

Facebook's "infamous" Free Basics platform was shut down by Telecom Regulatory Authority of India (Trai) due to net neutrality concerns. Under Free Basics, Facebook wanted to provide free access to certain services to a certain segment of internet users. At that point in time, Facebook had launched the service via a tie-up with Anil Ambani's Reliance Communications. Could Facebook use Jio to do something similar again?

However, this may be more conjecture than reality.

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".

Right now, telcos like Jio can provide free access to their streaming apps etc, but it cannot forego users' data usage for that purpose. Jio may be able to allow free access to Facebook's apps, but, it won't be able to provide data usage-free access to it.