India’s fastest growing telecom network Reliance Jio and the world’s largest instant messaging service WhatsApp are in early talks to create a version of the messaging service that will work on millions of 4G phones that the former plans to sell.

The two companies have been talking about launching WhatsApp on JioPhone, the 4G enabled phone launched by the Mukesh Ambani-led Reliance Jio earlier this month, according to two sources.

“There have been a few meetings between Reliance Jio officials and WhatsApp officials… but the discussions are preliminary,” said one source. The second source, close to Reliance Jio said, “The talks are on. We already have a relationship with Facebook… There are technical challenges. A version (of Whatsapp) is needed that will work optimally on the JioPhone.”

At the annual general meeting of Reliance Industries last month, Ambani, India’s richest man, unveiled the 4G enabled feature phone to a cheering crowd. The phone, priced at Rs 0 (with a 3-year refundable deposit of Rs 1500) comes loaded with a bunch of Jio Apps and dirt cheap data plans. It supports Facebook and YouTube as well. However, WhatsApp, which is a big draw for Indian phone users, does not have a version that works on the phone, which reportedly runs on KaiOS, a forked version of the Firefox operating system.

Also see: Why Reliance Jio is the next shot in the arm Indian internet needed

Even though Jio, with nearly 125 million subscribers, has its own messaging service called JioChat, WhatsApp is too big to ignore. “Jio does not want to miss on the critical mass effect of Whatsapp,” said the first source. Nearly 200 million Indians use WhatsApp. WeChat, Imo.me, Messenger and Allo are the other popular instant messengers in India.

“…let us not forget that in this 78 crore, there are more than 50 crore feature phone users who have been left out of the digital revolution.… Even an entry-level smartphone costs between Rs 3,000 to Rs 4,500 making it unaffordable for feature phone users to upgrade to a smartphone,” Ambani,60, said in his speech at the 40th annual general meeting of RIL.

Facebook understands Jio’s importance. Its chief financial officer David Wehner in February said that free data plans (referring to Reliance Jio) grew Facebook usage in India and Asia Pacific.The free offers have led to a rise in data consumption — something that is critical for Facebook, which makes most of its money from selling digital ads.

Also see: Reliance Jio’s free services are unfair competition: Sunil Mittal

According to a Crisil report published in July, data usage per subscriber has risen over 20-fold in the past five years, especially after the roll out of free services by Reliance Jio. Peak data usage on Reliance Jio was five to six GB compared, 1.25 GB for the overall industry.

“Having a specialized version of Whatsapp will be a unique selling point for Jio handsets, and will help them to grow in the market as well,” said Neha Dharia, senior analyst with Ovum, a London-based consultancy firm.

Whatsapp, helmed by CEO Jan Koum (in lead picture of this story), declined to comment on the story, and so did Reliance Jio.

Whatsapp’s India connect

Whatsapp is deeply entrenched in India. “In villages, people might not have water to drink, but they use Whatsapp,” said Jasminder Gulati, co-founder, and chief traffic officer, NowFloats — the company that collects digital user and commerce data by traveling by road throughout the country.

In May 2015, when NowFloats launched its first DigitalDesh report, Gulati said that only 10 people of the 210 people they met used Whatsapp. “A year later in May 80% of the country was using Whatsapp, and in December there were more people on the platform,” he said.

He points out that people sell, buy and advertise within communities using Whatsapp. We had reported earlier that Whatsapp is being used in India’s hinterland by farmers to change their lives.

Gulati also pointed out that it might be peer pressure that Whatsapp is looking at a strategic partnership. Paytm is launching chat. “Paytm is building the WeChat of India, so Whatsapp might want to go to Reliance Jio,” said Gulati. But, still, there has to be a big enough reason.

A New Whatsapp, exclusive to JioPhone?

“Unless Whatsapp is launching deep vernacular capabilities, with shades of WeChat with built-in commerce and payments into it for Jio users, it doesn’t make sense,” Gulati said. That is because Whatsapp is also the simplest application out there with sophisticated code that allows it to be used on a wide range of phones. It is efficient in data consumption, is intelligent to optimise and compress files while sending.

Gulati points out Whatsapp for Reliance Jio might be a pilot of sorts for Whatsapp to see how integration with Facebook and Instagram works. Those have not been tested yet.

Meanwhile, Whatsapp has received a UPI license, which allows it to start payments — a space where both Ambani and Whatsapp has interests in.

Whatsapp’s co-founder Brian Acton had told this reporter in February that the company is looking to launch Whatsapp for Business in an attempt to monetise the platform, by connecting small and medium businesses in a meaningful way to improve their business.

Whatsapp’s partnership with Reliance Jio can be a move in that direction if it allows more features exclusively for Jio users, at least in the beginning.

“It will help them really scale, given that Jio will be able to get mainstream users online via their handsets. It will also be beneficial for WhatsApp if they move beyond voice and messaging and incorporate payments and other services on the platform,” said Dharia.

Such deals, however, are protracted. For instance, Google and telecom networks negotiated for many months before the search giant could swing deals to enable carrier billing on telecom networks like Airtel and Idea.

The first source said, “Reliance Jio has definitely changed the digital landscape of the country, but Facebook and Whatsapp put together has a sizable presence… Facebook will look at exclusive deals if it comes out with a special version of Whatsapp.”

By exclusive, the source meant special partnerships to boost Facebook’s Express WiFi, which gives cheap internet access at hotspots, or getting brands onto the platform jointly. Only time will tell how this partnership will evolve.

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