Unitech Wireless, the Indian mobile joint-venture between India’s Unitech and Norway’s Telenor, has secured a INR5,000 crore (US$1.03 billion) loan from the State Bank of India (SBI) in a bid to fund its network rollout, reports Economic Times. The firm is planning to launch services in selected Indian telecoms circles before the end of the year but admits it is facing several years of losses before it breaks even. According to Unitech Wireless’ MD, Stein Eric Vellan, the operator has earmarked capex of INR2,500-3,200 crore (US$516-660 million) for its current fiscal year and anticipates an EBITDA loss of INR1,100-1,400 crore (US$225-289 million) over the same period. He added that the firm was targeting an EBITdA breakeven in three years and an operating cash flow breakeven within five years of launch. However, Vellan said that total operating losses before breakeven is expected to be INR15,500 crore (US$3.2 billion).
Following the cash injection from SBI, Unitech said there was no further equity required in the joint-venture, which will eventually be owned by Telenor (67 percent) and Unitech (33 percent). Vellan said the company is targeting 8 percent share of the Indian market, where it has licenses to rollout services in 21 of the country’s 22 circles. Economic Times notes that Unitech is gearing up for launch in December and has more than 900 employees on board with more than 1,200 shortlisted distributors.
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