Indian billionaire Mukesh Ambani's telecommunication company, Reliance Jio Infocomm is in talks with a clutch of global banks to raise around $1-1.5 billion through an offshore syndicated loan, according to a report by the Economic Times.
The English Daily said Reliance Jio will use the funds to buy 5G network gear from Sweden's Ericsson as it plans to roll out next-gen mobile broadband services by fall this year.
Global lenders such as JPMorgan Chase, Citi, HSBC, and the like are set to arrange around 3-5 year loans for Jio which is likely to be priced above the Secured Overnight Financing Rate (SOFR), the ET reported.
The pricing of the loans could be around 100-150 basis points above the SOFR.
Additionally, European export credit agency Finnvera is likely to issue guarantees to the lenders for extending the offshore loan to Jio.
Ambani's Jio has been rapidly expanding its 5G coverage since last October. The telecom operator has already rolled out 5G services in around 5,700 cities/ towns in the country.
Jio has said that it will make a cumulative 5G investment of $25 billion, of which $11 billion was spent on acquiring the 5G spectrum.
Jio is the only Indian telecom operator which went for the 700 MHz spectrum in India's 5G spectrum auction. Jio is primarily working with European network vendors Ericsson and Nokia for its 5G deployment.
The telecom operator is looking to raise around $1.6 billion to fund the purchase of equipment from Nokia Oyj.
Nokia announced last October that it had clinched an agreement to supply Jio with equipment for its 5G rollout in India. Ambani’s Reliance Industries Ltd. was the first out of the starting blocks to offer 5G in India, after investing billions of dollars to acquire the airwaves.
Jio's rival Bharti Airterl's 5G network rollout is lagging in India, according to an analyst report.
Analysts at investment services provider JP Morgan in the report said the measured coverage could prompt a higher capital expenditure over the next 12-18 months by Bharti Airtel, which could face potential market share losses if the coverage gap is not closed.
Equity research firm Jefferies in its analysis of subscriber data released by the telecom regulator Trai for April said that expanding subscriber base was led by Jio's 4.7 million active subscriber additions, while Bharti's active subscriber adds were a touch soft at 0.7 million- the lowest in the last six months.
On 5G availability, the JP Morgan report mentioned that Jio's users are connected to 5G, 37% of the time against just 14% for Bharti Airtel.
5G availability in Bharti's top circles by revenues also lagged Jio by similar levels (36% vs Bharti at 13%).
In terms of 5G reach - which means the average proportion of locations where consumers are connected to a 5G network out of all locations visited – Jio is at 4.2 against Bharti Airtel's 3.4, with the Mukesh Ambani-group company leading in 21 circles, the report said.
"Jio also leads Bharti on 5G download speeds at 323 Mbps vs Bharti at 258 Mbps nationally and in most circles," the report said while attributing data to Opensignal.
