Reliance JioGigafiber all set for its next big move
- Reliance to monetize its fiber assets
- Monetized to be done via a sale and leaseback or infrastructure investment trust structure
- Airtel and Vodafone are planning fiber joint venture
According to reports Reliance wants to monetize its fiber assets and is eyeing global investors. The firm is under the process of demerging its fiber assets into a separate company. Then it could be monetized through a sale and leaseback or infrastructure investment trust (InvIT) structure.
As per a report in Economic Times, "Global pension and sovereign wealth funds and long-only infrastructure-focused financial investors have been sounded out as Reliance Jio Info comm's efforts to monetise its pan-India optic fiber assets to deleverage its balance sheet gather momentum." At the beginning of this year, to reduce debt and strengthen its balance sheet, the company told about the plans to monetize its tower and fiber assets. This move looks to be a precursor to transferring fiber and tower assets into two separate firms to monetise.
All that you need to know about the reported plan and more:
1. Appointed Investment banks
As per the report, quoting sources, investment banks Citi, Moelis and ICICI Securities have been appointed to reach out to potential investors. These can be across America, Asia, Australia and the Middle East.
2. The valuation of the fiber assets is expected to be in the range of $6-8 billion.
3. The transaction is likely to be completed by the middle of the new financial year.
4. Presently Reliance Jio operates 220,000 towers.
5. Reliance Jio has more than 300,000 route kilometre of fiber.
6. Reliance Jio claims JioGigaFiber to have good customer interest across 1400 cities as of now.
7. JioGigaFiber will offer its users a package of services including high-speed internet access, video on demand, broadcast and IPTV, music, video conferencing and e-commerce and more, all enabled by a single connection.
8. Jio also plans to offer IoT services using the same pipe, excluding the home broadband services.
9. Airtel and Vodafone are also planning fiber joint venture, which is likely to be on the same lines as their co-owned tower company, Indus Towers.
10. The company is targeting around 50 million subscribers.