US based chip manufacturer, Qualcomm, has become the latest company to invest in the digital wing of India’s biggest telco, Reliance Jio.
Through its investment arm, Qualcomm Ventures, the US chip firm will take a 0.15 per cent, $97.125 million stake in Jio Platforms.
“With our shared goal of extending the benefits of digital connectivity to everyone and everything, we anticipate Jio Platforms will deliver a new set of services and experiences to Indian consumers. With unmatched speeds and emerging use cases, 5G is expected to transform every industry in the coming years. Jio Platforms has led the digital revolution in India through its extensive digital and technological capabilities. As an enabler and investor with a longstanding presence in India, we look forward to playing a role in Jio's vision to further revolutionise India’s digital economy,” said Steve Mollenkopf, CEO of Qualcomm Incorporated.
Qualcomm has joined a swathe of international investors who have invested in Jio Platforms in recent months, with India’s largest telco selling off a series of minority stakes in its digital platform to investors from the US and the UAE, generating 1.04 lakh crore rupees (around $13.6 billion at today’s exchange rate).
To date, US Social media giant, Facebook, has invested the most, acquiring a $5.7 billion for a 9.99 per cent stake in Jio’s digital platform, as the company prepares to launch a raft of pay services across its Facebook Messanger, WhatsApp and Instagram services in India.
Last month, US wealth fund Silver Lake increased its initial investment in Jio Platforms to take its total holding to 2.08 per cent.
UAE based investment firm Mubadala also invested $1.2 billion for a 1.85 per cent stake in Jio Platforms.
Reliance Jio’s parent company, the Mukesh Ambani owned Reliance Industries, will use the cash to help pay down its levels of debt. Reliance industries has now sold more than 21 per cent of its shares in the Jio Platforms business unit.
The latest investment by Qualcomm highlights a trend of US firms investing in Indian telcos, as the US appears to be opening up a new front in its epic trade war with China.
Last month, India took the unprecedented step of banning 59 Chinese mobile apps, including popular social media platforms WeChat and TikTok, as tensions between the two countries continued to simmer.
The Indian government said that it had taken the measures to protect the “sovereignty and security” of the country. US government officials were quick to praise India’s stand against Chinese tech firms.
India and China’s respective militaries were involved in skirmishes at key strategic boarder points over the past weeks, as tensions between the two nations have ratcheted up.
The move came as the Indian government deliberates over whether to allow Chinese vendors, such as ZTE and Huawei, to participate in its next generation network build out. The decision to ban Chinese apps on the grounds that they pose a security threat will set a worrying precedent for Chinese network equipment vendors’ prospects in India.
India is the world’s second largest telecoms market, with close to 1.2 billion subscribers.