US tech giant Google has agreed to pay $4.5bn for a 7.7% stake in Reliance Industries‘ digital subsidiary, Jio Platforms, an Indian firm which operates a 4G network and has several other apps and services within the country.

The investment follows a string of others from notable global tech firms, Jio raised approximately $20.2bn in the past four months from 13 investors by selling a 33% stake in the firm.

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Key investors range from US social media giant Facebook which invested $5.7bn, to successful private equity firms such as Silver Lake, KKR, Vista and Mubadala. Google’s investment marks a rare occasion in which the company has invested alongside its rival, Facebook.

Reliance Jio has caused a stir in the India wireless telecoms market

Competition in the wireless telecommunication services market has intensified remarkably since the disruptive launch of mobile services by Reliance Jio in September 2016. Jio disrupted the market immediately upon entrance by introducing an offer that provided free unlimited services for customers who signed up before the first 90 days of its operations.

The offer was then unexpectedly extended for an additional 90 days due to a loophole in the TRAI regulation, with the company meeting its target subscriber count within just 180 days of launch.

Upon its entry, Jio offered the lowest data rates in the world, which has had a huge impact on the whole market, changing customer demands. Data plans initially ranged from $0.3 to $80 a month, with a focus on simplifying tariff plans to cater to a wider demographic. Prior to Jio’s entry, customers were paying $0.1/min for voice calls and $4/GB for data on average in India.

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Jio has launched its fiber based fixed broadband services, while the service dubbed ‘Jio Gigafiber‘ is planned to be available to both residential and business customers across 1,100 cities. The company entered the postpaid segment with the launch of its first plan in May 2018. The $2.84 postpaid plan included 25GB 4G data traffic, unlimited SMS, voice calls and subscriptions to Jio Apps.

The Indian market offers huge potential

The Indian wireless telecoms and broadband market offers huge potential, as seen by its previous successful launches, therefore it is clear to see why the company has caught the eyes of leading tech firms.

India’s population grew by 1.1% in 2019 to reach 1.3 billion and the population has steadily increased in recent years. Additionally, the country also has a large working age population which is set to expand in the coming years, creating a strong demand for Jio’s products.

Google’s decision to invest in Jio is likely to prove lucrative due to it already being poised to become the strongest player in the wireless telecoms market.