India’s Reliance Jio Infocomm aims to raise Rs150bn (US$2.22bn) in a rights issue as it gears up for its commercial 4G launch. The news comes hot on the heels of the nascent 4G operator inking spectrum trading and sharing deals with rival Reliance Communications.
India’s Reliance Jio Infocomm aims to raise Rs150bn (US$2.22bn) in a rights issue as it gears up for its commercial 4G launch.
The board of Jio, the telecoms unit of billionaire Mukesh Ambani’s Reliance Industries (NSE:RELIANCE), has approved the issue of an additional 15 billion equity shares at Rs100m (US$1.48m) apiece, according to a company stock exchange filing.
The company, which is expected to launch around April, did not say how it would use the proceeds and a spokesperson declined comment.
The news comes hot on the heels of Jio inking spectrum trading and sharing agreements with the country’s fourth largest mobile operator, Reliance Communications (NSE:RCOM), which is part of Mukesh’s brother Anil Ambani’s Reliance Group.
Jio is buying 800 MHz spectrum in nine service areas (circles) from RCom which, according to local media reports, will cost some Rs45bn (US$664.7m). The two operators have also agreed to share 800 MHz spectrum in 17 circles.
Jio says it has invested some Rs340bn (US$5.03bn) in spectrum ahead of its launch, giving it the largest footprint of liberalised airwaves in the country. It says it also laid more than 250,000km of fibre optic cable, with a view to 100% national coverage by 2018.
Jio’s entry is expected to trigger a wave of consolidation that could shrink the market from about a dozen to six or fewer players. Bharti Enterprises chairman Sunil Mittal said in early December that he expects the survivors to be Bharti Airtel, Vodafone and Idea Cellular – the three largest mobile operators – along with Jio, state-run BSNL-MTNL and perhaps another merged entity.