Reliance Jio secures $1 billion Korea Insurance term loan to fund LTE network expansion

By: | Updated: June 25, 2018 6:58 PM

Reliance Jio Infocomm has secured a $1 billion term loan to fund its LTE network equipment purchase from Samsung Electronics and Ace Technologies for a period of up to nearly 11 years, it said in a statement.

In 2012, Samsung Electronics has signed an exclusive deal with Reliance Jio Infocomm in order for LTE network equipment supply.

Reliance Jio Infocomm has secured a $1 billion term loan to fund its LTE network equipment purchase from Samsung Electronics and Ace Technologies for a period of up to nearly 11 years, it said in a statement. The term loan is Reliance Industries group’s fourth K-SURE-covered funding facility in the last five years, and Reliance Jio Infocomm’s second in the last three years. Earlier in 2015, Reliance Jio Infocomm had secured a $750-million term loan covered by Korea Trade Insurance Corporation (K-SURE) for its network equipment vendor Samsung’s sale of LTE gear to it.  Reliance Jio Infocomm Limited is a subsidiary of Reliance Industries Limited.

In 2012, Samsung Electronics has signed an exclusive deal with Reliance Jio Infocomm in order for LTE network equipment supply. It was in September 2016 that LTE services started getting installed throughout the country. Samsung Electronics business in India ranges from equipment for core infrastructure that includes base stations and voice over LTE services to installation of telecommunication networks.

Reliance Jio Infocomm’s loan facility was arranged by Australia and New Zealand Banking Group Limited and the Hong Kong and Shanghai Banking Corporation Limited, Reuters reported.

Meanwhile, during the January-March period of 2018, the company’s net profit at Rs 510 crore was up 1.2 percent sequentially, and higher than that of Bharti Airtel. However, tariff cuts in January, which also saw the introduction of a Rs 49 pack for its feature phone (JioPhone) offer from the earlier Rs 153, saw its average revenue per user (Arpu) drop a sharp 11 percent to Rs 137 compared with the preceding quarter.

Reliance Jio is looking at cover 99 percent of India’s population by the end of the current fiscal. “India’s digital services market is continuing its exponential growth trajectory with Jio expanding its coverage and further deepening in existing areas to achieve 99 per cent population coverage during FY 2018-19,” Reliance Industries Limited (RIL), parent firm of Jio, said in its annual report released earlier this month. The company is reported to have 186.6 million subscribers as on March 31, 2018, up by around 83 million compared to 2016-17, with average revenue per user of Rs 137 per month.

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