Vodafone Idea concludes $3.6-billion deal with Nokia, Ericsson, Samsung

Vodafone Idea said on Sunday that it had concluded a deal worth $3.6 billion (around Rs 30,000 crore) with Nokia, Ericsson, and Samsung for the supply of network equipment over the next three years, marking the Indian company's largest capital expenditure (capex) investment that paves the way for rapid network upgradation. The development marks the first step towards the rollout of Vodafone Idea’s three-year capex plan to the tune of $6.6 billion (Rs 55,000 crore).

The Mumbai-headquartered telecom service provider's capex programme is directed towards expanding its 4G population coverage from 1.03 billion to 1.2 billion, launching 5G in key markets, and capacity expansion in line with data growth. Vodafone Idea, a partnership between Aditya Birla Group and Vodafone Group, has continued with its existing long-term partners Nokia and Ericsson, whereas Samsung has been onboarded as a new partner.

Vodafone Idea said its top priority is "to expand the 4G coverage to 1.2 billion Indians". After the recent equity raise of Rs 24,000 crore and additional spectrum acquisition of Rs 3,500 crore in the June 2024 auction, it 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 per cent 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," said Vodafone Idea. 

"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," said Akshaya Moondra, CEO, Vodafone Idea. 

"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,” Moondra added. 

Vodafone Idea said that its capital expenditure is currently being funded out of the equity raise.

For the long-term Capex, Vodafone Idea 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, it said. 

"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. Basis this report the banks will now progress with their internal evaluation and approval processes," it added. 

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