Mumbai: Reliance Industries Ltd (RIL) will invest an additional 15,000 crore in telecom unit Reliance Jio Infocomm Ltd to expand its wireless network.

Reliance Jio’s much-delayed and much-anticipated broadband services will be launched later this year. The service has already been opened to around 1.5 million people—employees, vendors, and those referred by them.

RIL will increase its equity in Reliance Jio from the current 45,000 crore to 60,000 crore shortly by way of a rights issue, the company told analysts on 15 July after its first quarter earnings announcement.

Chairman Mukesh Ambani, India’s richest man, is investing 1.5 trillion in Reliance Jio to ensure the company has one of the widest networks in the country when its service debuts later this year. The latest fund infusion will allow Reliance Jio to extend its ability to provide fourth-generation wireless services to 90% of India from the current 70%.

“I do not see RIL’s fresh equity infusion as a concern," said Deven Choksey, managing director of KR Choksey Investment Managers. “The company’s plans with regard to Jio may be delayed a bit but a large network like this requires time. Besides, RIL has a strong balance sheet and the company is well capitalised."

RIL’s cash and cash equivalents as on 30 June were at 90,812 crore compared with 89,966 crore as on 31 March this year.

So far, RIL has spent 1.34 trillion on Jio, funded by a combination of equity ( 45,000 crore), debt ( 47,000 crore), vendor financing ( 28,000 crore), and deferred spectrum payments ( 14,000 crore). This spending has helped Reliance Jio cover 70% of India with 270,000km of fibre optic cables and 92,000 towers.

Some analysts say RIL may exceed its initial capex forecast.

“We expect RIL to cross its guidance of 1.5 trillion capex by launch," said Motilal Oswal Securities Ltd in a report dated 18 July.

RIL has spent 50,000 crore on spectrum, 40,000 crore on physical assets, 35,000 crore on building network infrastructure (towers and fibre network) and the remaining on interest and operating expenditure.

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Edelweiss Securities said in a 15 July note that by the end of 2016-17, Reliance Jio would have used up its planned capital expenditure of 1.5 trillion and covered 90% of India.

On 15 July, RIL said Jio had over 1.5 million test users on its network and the trial programme will gradually be upgraded to commercial operations in the coming months.

The company added that it was evaluating options for the launch of Reliance Jio’s pan-India network. “We are moving towards complete readiness and evaluating our launch options," said Anshuman Thakur, head of strategy and planning.

The average monthly consumption per (test) user is in excess of 26GB and is increasing rapidly, said RIL.

Even as Jio readies for the launch, operators including Bharti Airtel Ltd and Idea Cellular Ltd have cut data tariffs to retain customers.

Thakur said Reliance Jio won’t go down the discounting path but focus on offering the right value to customers. “It is not the pricing or cost that we are looking at. Our proposition is fairly differentiated for people to come to this network."

In its presentation to analysts, RIL said sales of LTE (long-term evolution, a technology standard) smart phones were growing rapidly. Currently, they make up over 65% of all smart phone sales, it said. Globally there are over 1.29 billion LTE subscriptions, said RIL.

This month, Reliance Retail cut the price of its Flame smartphone variant from 4,000 to 2,999, making it the most affordable 4G handset. RIL had sold 2 million LYF handsets at the end of June.

On 14 July, the company decided to expand its user base by extending a three-month unlimited data preview offer on purchase of Samsung smartphones. It plans to extend this to other smartphones as well. RIL is targeting 100 million users in the first year of operations.