Bharti Airtel intends to raise funds via a private placement of bonds in order to take on Reliance Jio Infocomm. Airtel, which will announce its Q3 results on the same day, however, didn’t disclose the amount it plans to raise. The announcement has come after Jio said it is getting an infusion of Rs. 30,000 crore from Reliance Industries, to be spent on the expansion and improvement of its network.
In a notice to the stock exchanges, the company said the board of directors will consider the issue of debentures or bonds through private placement at a meeting on January 24. It is already in talks with private equity firm KKR and Co. to sell as much as a 40 percent stake in its tower infrastructure unit, Bharti Infratel.
This comes right after Mahesh Uppal pointed out that even though cheap tariff is hurting the revenues of Reliance Jio, as in the case of other networks, it also presents an opportunity for the latest entrant to fine-tune its network to gain traction among users, says a telecom expert.
“The relatively low tariff of Jio is the opportunity also to further fine-tune their network itself because there are gaps, there are issues in network-optimisation,” Mahesh Uppal, director of telecom consultancy firm Com First told BTVi in an interview. “So while the company gets its network up to speed, it is good idea for them to makeover — through out of necessity — and by actually giving cheap or free services,” he said.
With inputs from Reuters
Disclaimer: Reliance Jio is owned by Reliance Industries, who also own Network18, the publisher of Firstpost and tech2.