India's largest operator, Reliance Jio Infocomm, is said to be raising up to $2 billion in offshore loans with major international banking establishment BNP Paribas as lead arranger of an initiative that will help fund the purchase of 5G network gear from Ericsson.
As India’s Economic Times reports, BNP Paribas will provide US$1.9-2 billion over a nine-month period. Swedish export credit agency EKN recently provided US$2.2-billion cover to Reliance Jio. This will insure Ericsson, and big lenders like BNP Paribas, from risk.
This is clearly a very big loan – and monetisation of 5G services is at least a year away, with widescale availability of a variety of devices – not to mention revenue-earning use cases – by no means guaranteed. There’s also the potential snag of rupee depreciation versus the US dollar.
Jio apparently plans an overall 5G investment of about US$25 billion. Spectrum has already cost it about US$11 billion, which includes the 700MHz band of which Jio is the only holder. Local reports suggest that Jio is likely to achieve pan-India 5G coverage by December this year. It already claims some 50 million 5G users of services rolled out to around 6,260 cities and towns.
Unlike its competitors, it is going for a standalone 5G network rollout across the country. In fact Jio boasts that it will be the largest 5G SA-only network operator in the world in the second half of 2023. Bharti Airtel, which started deploying its 5G service in India from October 2022, is using non-standalone technology.