An Indian company is developing a US$5.5bn, state-of-the-art wireless communications network with Lucent technology thanks to a US$500mn long-term loan guarantee from US Ex-Im Bank.
The guarantee will enable Lucent Technologies and 10 other US high-tech companies to sell telecommunications equipment to Reliance Infocomm (RIL) of Navi Mumbai, so that it can develop India’s first nationwide CDMA network. An affiliate of Citibank is the guaranteed lender.
RIL plans to complete this national cellular and fixed-line network by 2006, by using this financing, along with US$3.4bn in equity provided by its parent company, the Reliance Group, US$1.1bn in financing from 18 Indian banks, a US$250mn facility from Export Development Canada, and US$250mn from an international banking consortium led by ABN Amro in Singapore.
As of May 2004, RIL, which was established in 2003, had about 22% share of India’s 36mn cellular subscribers. The new system will have the widest mobile reach, covering 95mn of the Indian market.
US Ex-Im, which had US$967mn in exposure in India before this transaction, has supported two previous US export transactions involving the Reliance Group, India’s largest private-sector entity.