Vodafone Idea signs $3.6bn deal with Nokia, Ericsson & Samsung; to focus on 4G expansion, launch 5G network

Cash-strapped, debt-ridden, Vodafone Idea (Vi) has concluded a deal worth $3.6 billion with Nokia, Ericsson and Samsung for supply of network equipment over a period of three years. In a release issued on September 22, the telecom player said the deal marks the first step towards the rollout of its three-year capex plan of $6.6 billion (Rs 550 billion).

The capex programme is directed towards expanding the 4G population coverage from 103 crore to 120 crore, launching 5G in key markets and capacity expansion in line with data growth, Vi said. The company has continued with its existing long-term partners Nokia and Ericsson and also onboarded Samsung as a new partner.

These contracts will allow the company to quickly capitalise on the latest state-of-the-art equipment to offer enhanced customer experience, Vi added.

Commenting on the development, Akshaya Moondra, CEO, Vodafone Idea Limited, said, “We are committed to invest in emerging network technologies to provide a best-in-class experience to our customers. We have kickstarted the investment cycle. We are on our journey of VIL 2.0 and from hereon, VIL will stage a smart turnaround to effectively participate in the industry growth opportunities. Nokia and Ericsson have been our partners since our inception and this marks another milestone in that continuing partnership. We are pleased to start our new partnership with Samsung. We look forward to work closely with all our partners as we move into the 5G era.”

In addition, the new equipment will also lead to efficiency gains in energy and thus lower operating costs, the release said. The supplies against these new long-term awards will start in the coming quarter. The top priority for the company is to expand the 4G coverage to 120 crore.

Post the recent equity raise of Rs 24,000 crore and additional spectrum acquisition of Rs 3,500 crore in June 2024 auction, the company has also executed some quick win Capex, while simultaneously working on concluding these long-term contracts.

These quick wins were mainly by way of deployment of more spectrum on existing sites and also the roll out of some new sites. This is resulting in 15 percent boost in capacity and an increase in population coverage by 16 million by end September, 2024. We are already witnessing an improvement in customer experience in select geographies where these rollouts have been completed, Vi said.

For the long-term capex, the company is in advanced stage of discussions with its existing and new lenders to tie up Rs 25,000 crore of funded and Rs 10,000 crore of non-fund-based facilities.

One of the major steps in this process was the completion of techno economic evaluation of the company’s long-term projections by an independent third party, which was recently completed. The report has been submitted to all the banks and financial institutions, Vi said. Based on this report the banks will now progress with their internal evaluation and approval processes, it added.