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October 3, 2023
Reliance Jio Infocomm has reportedly secured a multi-billion-dollar loan to enable it to buy 5G equipment, coinciding with reports that Indian consumers are getting hooked on the new generation of mobile tech.
India’s biggest mobile operator has inked a loan deal worth US$1.5 billion-$2 billion with HSBC specifically to fund the purchase of 5G network equipment from Nokia, the Economic Times reported, citing people familiar with the situation. Finland’s Finnvera has provided insurance cover worth a similar amount, they said.
The move follows a similar arrangement Reliance Jio set up with BNP Paribas, which also provided a near $2 billion loan for 5G kit from Ericsson, with insurance put in place through Swedish export credit agency EKN, the paper explained.
Reliance Jio has made much of its aim to complete its nationwide 5G rollout by the end of the year, and naturally that incurs sizeable cost; it was talking about a figure of 2 trillion rupees this time last year, or just over US$24 billion. At parent company Reliance Industries’ AGM last month, chairman Mukesh Ambani reiterated that year-end target and shared that the Jio 5G service is already present in 96% of census towns in the country.
Jio claims that almost 85% of the total 5G cells operational in India are on its network. According to Ambani, Jio is adding a 5G cell to its network every 10 seconds and will have close to 1 million operational 5G cells by December.
Arguably more importantly, the telco is racking up customers. Ambani disclosed in his AGM address that Jio’s 5G customers had passed the 50 million mark, and the Economic Times noted that the figure is now north of 62 million.
Major rival Bharti Airtel is not far behind. At the weekend it announced it has signed up more than 50 million unique 5G customers within a year of the launch of its Airtel 5G Plus service. It added that the service is available across all 28 states and eight union territories in India, which gives the suggestion of a pan-Indian rollout, but clearly the operator is choosing its words carefully.
“We are thrilled at the speed of adoption to 5G by millions of our customers and we are reaching this milestone earlier than planned,” said Bharti Airtel CTO Randeep Sekhon. “This marks a big expansion of Airtel’s 5G coverage going from 1 million in October of 2022 to 50 million in just 12 months of the launch. The expansion continues at full speed and I am sure, we will continue to rapidly multiply as we work towards nationwide coverage and enable all our customers to enter the 5G age.”
Bharti Airtel and Reliance Jio will need that broad coverage if they are to satisfy what is starting to look like encouraging demand for 5G services in India.
The operators’ own customer numbers show that demand is there, and on Tuesday a new study from Ericsson indicated that many people in India plan to buy a 5G device before the end of the year…if they haven’t already.
Specifically, the vendor – in its Ericsson ConsumerLab ‘5G Value: Turning performance into loyalty’ report – estimates that 31 million users in India will upgrade to 5G in 2023.
That figure perhaps feels a little low, given that the big two telcos between them claim to have signed up more than 100 million 5G users less than 12 months after the launch of services, but it’s always good to have an outside perspective.
Arguably more pertinently, Ericsson’s report claims that customer satisfaction among Indian 5G users is 30% higher than it is for 4G users, which certainly bodes well for operators spending billions of dollars on network rollout and are – understandably – keen to retain their early adopters.
Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.
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