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Off to the market for Rs 5,000 cr

Calcutta, April 21: Reliance Infocomm plans to raise Rs 5,000 crore in the first half of this financial year to fund the second and third phases of its country-wide telecom project.

Sources said the money is likely to be mopped up through a combination of debt and equity. “The exact nature of the instrument has not been decided yet. A team of senior officials is working on the financing pattern and is expected to give its report soon,” they added.

In the second phase, likely to kick off in June, the company is going to put in place an enterprise netway, which will help it provide 100 mbps ethernet links to five lakh enterprises for broad-band as well as interactive communication facilities.

The third phase, work on which should start in the third quarter of the current financial year, will take care of the needs of the individual subscribers with high-speed ethernet links. These will provide an entire range of services, including television channels, high-speed telephony, audio and video conferencing and video on demand.

Sources said the company plans to connect 2,000 cities and over six lakh villages over the next few years through its network.

Reliance Infocomm, poised for the commercial launch of its wireless-in-local-loop (WiLL) services on May 1, has completed much of the 60,000-km terabit capacity network of optic fibre cables across the country.

The company has already mobilised Rs 15,000 crore for the Rs 25,000-crore telecom project. While Rs 9,000 crore has been raised through debt, Rs 6,000 crore came from equity. It has made a financial commitment of more than Rs 11,000 crore to its optical fibre cable (OFC) project.

Asked whether the company will embark on the same strategy to garner the funds required for the second and third phases of the project, sources said a decision on this issue would be taken over the next few days. No public issue is planned in the immediate future.

Reliance Infocomm is reported to be in talks to farm out a slice of equity to a global telecom major. One of those in the reckoning is Qualcomm, a pioneer of CDMA technology believed to be keen on holding a stake. No concrete decision on the issue has been taken so far. In fact, the company entered into a memorandum of understanding with the US telecom major about 14 months back on divesting a 4 per cent stake.

Currently, the Reliance group and the Ambanis hold 40 per cent each in the company, while an employees’ trust retains the remaining portion of equity.

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