ET Markets
Stock Analysis, IPO, Mutual Funds, Bonds & More

Given its long-term commitment, Jio feels the need to monetise fibre optic assets: Nitin Soni

Going forward all your data will be transferred to fibre optics, says Soni.

ET Now|
Last Updated: Mar 11, 2019, 03.54 PM IST|Original: Mar 11, 2019, 03.54 PM IST
Nitin Soni-Fitch Ratings-1200
Optic Fibre InvIT will allow Reliance Jio to meet the funding needs for future capex, particularly for 5G spectrum acquisition, said Nitin Soni, Director, Asian corporates, Fitch Ratings, in an interview with ET Now.

Edited excerpts:

Jio is rolling out red carpet to global investors for its Optic Fibre InvIT. What would this funding actually mean?

From telecom point of view, both Voda-Idea and Bharti have raised money in the form of equity because the competitive intensity is still there in the market although we have not heard of any incremental cheaper tariff. But because Reliance Jio feels that given the long-term commitment in this sector and the continuous capex reach they would need to monetise their fibre optics assets -- over 300,000-km route available to them -- and this will provide them with the funding needs for future capex, particularly for 5G spectrum acquisition.

Going forward, whenever the regulator decides to do the 5G auction and considering that the per user data usage has also increased quite substantially in the last two years, there is bound to be some traffic congestion and to support the increasing demand of the data, Jio and other telecos need to invest continuously on capex.

What is your view on the valuation -- $6-7 billion is the estimated level that the reports are suggesting right now?

As a rating agency we do not comment on the valuation but I can definitely tell you that both fibre and tower assets are important enough to provide capacity going forward as an independent asset provider to all the telcos. That would be the structure in future because as we move along to 5G technology, any telco would have to have a strong backhaul to support 5G networks because going forward all your data will be transferred to fibre optics.

So unless you have fibre coverage you cannot really do a good job on 5G technologies and that is why in India compared to other regional countries if you see most of the countries have a good fibre coverage but India, Indonesia, Sri Lanka and some of the countries have quite weak fibre coverage and that could be a deterrence when it comes to 5G.

Fibre is really important for the newer technologies even for the fibre broadband and fibre-to-the-home. For future technologies, fibre is a critical asset to have.

Also Read

JioPhone Diwali offer drives subscriber growth for Jio in October: Analysts

CCI approves Reliance's divestment of Jio tower assets

Jio, UVARC emerge top bidders for RCom assets

Reliance Jio announces new tariff plans for JioPhone users

Questions for 2020: Jio does mega IPO?

Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links

Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service