Hurt by intensive new competition from Reliance Jio in India’s mobile phone service market and threatened by the impending merger between Vodafone India and Idea Cellular, Bharti Airtel is looking for overseas loans to firm up expansion plans.
India’s leading telecom service provider is looking abroad to raise about 69 billion rupees (US$ 1 billion) to refinance its high-cost debt. This will free up cash to expand its fourth generation (4G) mobile phone technology network in order to remain competitive, Economic Times reports.
Airtel Chairman Sunil Bharti Mittal is in talks with investment bankers to raise the syndicated loan in a month or two, the daily added.
Only 22 months after its entry into the mobile telephone sector, Reliance Jio has already attracted 215 million customers. This was announced by Reliance Industries Chairman Mukesh Ambani while addressing shareholders at the company’s recent AGM. Airtel’s customer base as of March, 2018 stood at 304.9 million subscribers, followed by Vodafone India (222.69 million) and Idea Cellular (211.2 million).
Reliance Jio recently tapped the Korean credit market to raise US $1 billion, only a few weeks after it raised 25 billion rupees (US$ 360 million) by selling domestic corporate bonds.
Vodafone and Idea are also expected to raise funds to boost their 4G network after their merger process is complete.