Reliance Jio Infocomm, a leading Indian telco has raised $2 billion in offshore loans. This is actually the largest loan in FY24 taken by an Indian company. Reliance Jio will use the loan amount to fund the recent 5G gear purchase from Finnish gear vendor Nokia. According to an ET report, the fund's lead arranger was HSBC. Further, as per the report, Finnvera is believed to have provided an insurance cover of a similar amount to Nokia and the other global lenders of the telco. It will help in reducing the overall funding costs for Jio and would make the lenders feel more comfortable in such a large deal.
Reliance Jio is deploying 5G SA (standalone) which is a costly affair as the telco needs to set up a new network infrastructure completely which is not the case with deploying 5G NSA (non-standalone). The telco is taking the help of Ericsson and Nokia in deploying 5G and has so far covered 7,764 cities and towns with its 5G.
It is worth noting that Reliance Jio also recently lined up a $2 billion offshore loan arranged by BNP-Paribas (lead) which was also used to fund 5G gear purchase. However, this loan was used to fund the purchase from Ericsson. EKN, a Swedish Credit Agency, had provided a $2.2 billion cover for the Jio-Ericsson 5G deal.
The telcos need to look at monetising 5G to justify the large sum of investments they are making. Jio AirFiber was recently announced by Reliance Jio to offer broadband internet services powered by the 5G network. This is the first product/service from the company that is monetising 5G. Whether it will be a hit or not, only time will tell as most users who already have JioFiber won't move towards the Jio AirFiber as there's no real advantage of doing so.