India’s largest telecom operator, Reliance Jio is on the verge of finalizing a significant contract worth around $1.7 billion (Rs 14,000 crore) with Nokia which is a leading telecommunications company based in Finland.
Reliance Jio Finalizing Deal With Nokia
The agreement is expected to be signed later this week at Nokia’s headquarters near Helsinki, where senior executives from Reliance Industries’ telecom unit and the banks involved in financing the purchase will be present, according to the sources.
For the unawares, this deal with Nokia comes in addition to Reliance Jio’s previous announcement of a $2.1 billion equipment purchase from Ericsson again a Swedish multinational networking and telecommunications company.
It appears that the telecom giant is actively preparing to introduce 5G mobile broadband services across India by the end of this year.
So, these equipment acquisitions are crucial steps in that direction.
Jio Preparing To introduce 5G Services Across India
Reliance Jio has secured support from several global banks, including HSBC, JP Morgan, and Citigroup, in order to finance these massive 5G equipment deals with Nokia and Ericsson.
In addition to that, the telecom operator is raising funds through syndicated offshore loans, totalling nearly $4 billion, as per the media reports.
Jio has been in talks with these foreign banks to secure financing for the Ericsson 5G contract, as reported by media.
In case of Reliance Jio, it holds exclusive 5G airwaves in the highly efficient 700 MHz band.
Hence, the company has opted for a standalone mode for its nationwide 5G rollout.
This simply implies that Jio’s network will not depend on the existing 4G infrastructure, and it will be implemented independently.
For the deployment of its 5G network, the company has primarily partnered with European vendors such as Ericsson and Nokia.
Further, Finnvera, a European export credit agency, will issue guarantees to the global lenders to facilitate the offshore loans extended to Jio.
Basically, this approach guarantees an increase in the lenders’ confidence and reduces overall funding costs, reportedly.
Jio has been rapidly expanding its 5G coverage from the October of last year and moving ahead aims to achieve a nationwide rollout by the end of 2023.
It has already introduced 5G services in over 6,000 cities and towns across India.
Jio plans to invest a total of $25 billion in 5G implementation out of which $11 billion was already spent on acquiring 5G spectrum last year.
In the next four years, the remaining $14 billion will be allocated for network assets and customer premise equipment.
