Reliance Jio Infocomm, the leading telecom operator in India, has secured nearly $2 billion through an offshore loan arranged by HSBC (LON:HSBA) in the fiscal year 2024. The loan is intended to fund the purchase of 5G equipment from Nokia (NYSE:NOK). Concurrently, Finnvera, a Finnish export credit agency, offered similar protection to Nokia and Jio's global lenders.
This move echoes a previous transaction where Jio secured a loan via BNP Paribas (OTC:BNPQY) for Ericsson (BS:ERICAs)'s 5G gear, with EKN providing a $2.2-billion cover. Both deals included an implied interest rate for their respective terms.
In the midst of these financial maneuvers, Jio has been broadening its 5G coverage. The company recently launched Jio AirFiber and maintains exclusive control over 5G airwaves in the 700 MHz band.
Analysts like those at Jefferies predict substantial revenue opportunities for Jio by March 2026. However, they also caution that additional rupee depreciation could escalate Jio's foreign debt repayment burden. This is particularly relevant as the company is currently seeking a $4 billion offshore loan to facilitate a nationwide 5G rollout with Nokia and Ericsson's gear.
HSBC, Finnvera, Jio, and Nokia have refrained from commenting on these developments.
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