“After four years of intense price pain, the India telecom battle could be in its last stretch,” said Raj Kothari, head of trading at Jay Capital Ltd. in London. “It’s down to the big boys and they are piling up funds for that.”
Emails sent to Bharti and Jio spokesmen seeking details on use of funds went unanswered.
Bharti said in the filing that the money would be be used for treasury activities, including refinancing, and for paying off spectrum dues. Jio hasn’t specified end use, though it has significant repayments due in the next few years, data compiled by Bloomberg show.
The total debt at four publicly traded wireless operators -- Bharti, Idea Cellular, Reliance Communications Ltd. and Tata Teleservices Maharashtra Ltd. -- has jumped 55 percent since the end of March 2016 to $34.81 billion, data compiled by Bloomberg show.
Jio, being a new player, needs to spend aggressively to grab market share, while Bharti is investing more to retain its lead, said Mehul Sukkawala, senior director for corporate ratings at S&P Global Ratings. “This competition could move to the fiber-to-home business in the future and the related bundling of services with fiber.”
Jio secured AAA rating for Rs 150 billion of debentures last week from Crisil Ltd., a unit of S&P Global, which cited the “irrevocable and unconditional” support from parent Reliance Industries Ltd. India’s most valuable company has invested at least $31 billion in the telecom venture. Crisil rates Bharti’s rupee notes at AA+.
Bharti and Jio won’t have a problem finding buyers, Jay Capital’s Kothari said. “Both have a good pedigree. Their debt will easily get consumed.”