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Indian mobile operator to plough funds into network upgrades as customer base tops 70 million.
Reliance Jio Infocomm on Monday revealed plans for a 300 billion rupee (€4.2 billion) rights issue, the proceeds of which will be spent on its mobile network.
The company said it will issue 6 billion non-cumulative, optionally-convertible preference shares (OCPS) at INR10 per share in cash plus a premium of INR40 per share.
The disclosure was made alongside parent company Reliance Industries’ financial results for the quarter ended 31 December 2016.
"In view of the unprecedented customer response to Jio’s services as well as to address the anticipated growth in demand for digital services, additional investments are proposed to be made into the network to enhance its coverage and capacity," Reliance said.
Jio has been offering nationwide voice and data services for free since 5 September, sparking a fierce price war in India’s mobile market.
On Monday, Reliance revealed that by the end of 2016, Jio had signed up 72.4 million subscribers.
"This level of growth has been unprecedented on any mobile network anywhere in the world," the company said.
Jio has also come to blows with rival operators, which have complained that their points of interconnection (POIs) have been flooded with inbound voice traffic from Jio customers availing themselves of the free calls.
Jio argues that its rivals are not providing sufficient POIs.
"The POI capacity provided by these operators is still way below requirement and is falling short of the customer addition pace of Jio, resulting in quality of service issues," Reliance said on Monday.
According to the company, 175 out of every 1,000 calls fails to connect. India’s quality of service (QoS) regulations require a failure rate of five per 1,000.
"Jio customers are still being denied the benefits of superior voice technology on Jio’s state-of-the-art network," Reliance said.
With Jio planning to continue to providing free voice and data until at least the end of March, the POI problems, and India’s bruising price war, are not set to end any time soon.
