India’s Bharti Airtel has secured financing of up to $2.5 billion from two top Chinese banks as the company aims to invest further in the growth of its mobile data networks.
The agreements came to the fore during Prime Minister Narendra Modi’s visit to China, as the two countries struck commercial business deals worth approximately $22 billion, according to the Financial Times.
Airtel, which has operations across 20 countries in Africa and Asia, has secured a commitment of up to $2 billion in credit from China Development Bank (CDB), and a further $500 million from Commercial Bank of China.
According to an Airtel statement, its agreement with CDB represents the single largest bilateral commitment by the bank to an Indian company, and its largest to any telecoms operator globally.
The funds are still subject to final approval, and Airtel will be able to draw on them over a long period of time, with loan maturities extended up to nine years.
According to data from GSMA Intelligence, Airtel is forecast to secure over 250 million total mobile connections by the end of 2016, maintaining its position as the country’s largest operator. At the start of the year, India neared 950 million connections, and is the second largest mobile market in the world behind China.
Rajan Bharti Mittal, vice chairman of Bharti Enterprise, said the agreements were part “of the growing economic cooperation between India and China”.
He said: “This is an endorsement of the long term potential of the Indian telecoms sector. Given the availability period, these financings shall further add to the financial flexibility that the company already has. These shall further extend tenors, enabling investments for furtherance of the Digital India Initiative.”
Earlier this year, Airtel also announced an agreement with China Mobile to collaborate on the growth of 4G, while working on a joint strategy for procurement of 4G devices, including smartphones. The company already has existing network equipment deals with Chinese vendors ZTE and Huawei.
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