Monday, 23 January 2017

Reliance Jio to get Rs 30,000 crore funding boost: 8 key points

Mukesh Ambani-led Reliance Jio is set to get a considerable funding boost, continuing the new operator's push towards increasing network expansion and capacity. This will further intensify the ongoing wars between Reliance Jio and other operators such as Bharti Airtel, Vodafone and Idea Cellular. Here are the eight key points:
1.Total funding to touch almost Rs 1.9 lakh croreWith this additional funding, the total investment in Reliance Jio will reach almost Rs 1.9 lakh crore.
2.​To be used towards network expansionApproved at a board meeting held on Friday, the investments will be used towards the expansion of Reliance Jio’s network capacity and coverage.
3.Investments to be financed through equity offeringAccording to Reliance Jio, "These investments are proposed to be financed largely through an equity offering, to strengthen balance sheet for growth."
4)Rights issue will be for non-cumulative OCPSThe rights issue will be for 6 billion 9% non-cumulative optionally convertible preference shares (OCPS) of Rs 10 each for cash, at a premium of Rs 40 per OCPS. The amount subscribed/paid on each OCPS shall be either redeemed at Rs 50 or converted into five equity shares of Rs 10 each, at any time at the option of the company, but not later than 10 years from the date of allotment.
5.​ 72.4 million subscribers by the end of last yearReliance Jio, which commenced its services from September 5 last year, had reached a subscriber base of 72.4 million by the end of 2016.
6.Free data offer to continue till March 31, 2017Jio entered the telecom space with lucrative offers such as lifetime free voice calling and limited-period complimentary data to its subscribers through two inaugural schemes - 'Welcome Offer' and 'Happy New Year'. Both come with zero tariffs on data downloads and the company has said that this will continue till the end of March 2017.
7.RJio's offers have shaken up the telecom industryThe company’s offerings have already shaken up the telecom industry, with established players such as Bharti Airtel, Vodafone and Idea Cellular announcing big cuts in voice and data tariffs.
8.Airtel has even taken legal action against TraiAirtel, the country's top telco, has even taken legal action against Trai over Jio's free services offer, accusing the telecom regulator of being a "mute spectator" to the "continued violations" carried out by the new mobile operator.

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