Sunil Bharti Mittal, the founder of Bharti Enterprises. Photo: AFP

Indian telecom major Bharti Airtel has raised US$750 million from overseas investors for refinancing, investment in subsidiaries and general corporate purpose. Investors based in Asia, Europe, and the US have contributed through a hybrid financial instrument, Press Trust of India reports.

In a statement, Bharti Airtel said that funds were raised by its wholly-owned subsidiary Network i2i Limited. The proceeds will be used to reduce debt and strengthen the company’s balance sheet as stiff competition has taken a toll on profitability.

Barclays Bank PLC, BNP Paribas, Citigroup Global Markets Limited, HSBC, JP Morgan Securities, Merrill Lynch (Singapore) Pte Ltd and Standard Chartered Bank acted as joint book-runners for the offering.

Bharti Airtel’s Treasury Head Ashish Sardana said that, against the backdrop of the current global economic environment, the strong response for its inaugural hybrid securities offering from high-quality investors across Asia, Europe, and the US underlines the future growth potential of its business.

This is the ninth time Bharti Airtel has raised financing through bonds since 2013. Two of the bonds issued earlier matured in 2018, Economic Times reports.

Bharti Airtel had reported a debt of 1.16 trillion rupees (US$16.32 billion) at the end of June and it aims to halve that by the end of this fiscal year. This will allow it to compete aggressively for subscribers with Reliance Jio and Vodafone Idea.

It has a subscriber base of 324 million in the country and has presence in 18 countries. It was once the leading telecom services provider in the country.

Shock for Jio users

Meanwhile, Reliance Jio, which had created major disruption in India’s mobile phone services landscape by doling out freebies, has shocked its 350 million users by announcing that they will have to pay six paise – cents – per minute while making voice calls from a Jio phone to some other network.

However, the company also announced that it will compensate customers by giving free data of equal value. Jio used to charge only for data; voice calls to anywhere in the country and to any network were free.

The newly-introduced charge will remain in place till the time telecom operators are required to pay the interconnect usage charges while connecting calls to subscribers of other networks. However, calls among Reliance Jio users will continue to be free.

The Interconnect Usage Charges have been fixed by the Telecom Regulatory Authority of India and currently it stands at 6 paise per minute. The regulator had earlier said this levy will come to an end by January 2020. But it has now floated a consultation paper to review whether the regime timeline needs to be extended.

Up until now Reliance Jio paid the interconnect charges from its own resources to Bharti Airtel and Vodafone-Idea while offering free voice calls to its customers. In the last three years, Jio paid almost 135 billion rupees ($1.9 billion) as interconnect charges to the other operators.

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