Vodafone Idea awards Rs 30k crore contracts to Nokia, Ericsson, Samsung for 4G, 5G gear supply
Debt-ridden Vodafone Idea on Sunday said it has awarded contracts worth about Rs 30,000 crore to Nokia, Ericsson and Samsung for supply of 4G and 5G network equipment for three years.
It is the largest deal awarded by any Indian telecom operator during this year.
The deal also marks the first step towards the roll-out of the company’s three-year capex (capital expenditure) plan of about USD 6.6 billion or Rs 55,000 crore announced earlier.
“Vodafone Idea (VIL) has concluded a mega, about USD 3.6 billion (around Rs 300 billion), deal with Nokia, Ericsson and Samsung for supply of network equipment over a period of three years. The capex programme is directed towards expanding the 4G population coverage from 1.03 billion to 1.2 billion, launching 5G in key markets and capacity expansion in line with data growth,” the company said in a statement.
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 1.2 billion Indians, the statement said.
VIL CEO Akshaya Moondra said that the company has started the investment cycle and it is on the journey of VIL 2.0.
“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,” Moondra said.
VIL was the biggest telecom operator formed with the merger of Vodafone India and Idea Cellular in August 2018 with a mobile subscriber base of 40.8 crore. With continuous decline in the subscriber, VIL is now left with 21.5 crore mobile services subscribers as per latest data released by telecom regulator Trai.
VIL had recently raised Rs 24,000 crore through sale of equity and will fund the capital expenditure from the latest capital.
The capex is currently being funded out of the equity raise. 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 funds and Rs 10,000 crore of non-fund-based facilities.
VIL said that it has completed techno economic evaluation of the company’s long-term projections by an independent third party.
The report has been submitted to all the banks and financial institutions basis which the banks will now progress with their internal evaluation and approval processes.
VIL in the last auction had acquired spectrum worth Rs 3,500 crore to increase its network capacity.
The company executed some quick-win capex for the deployment of more spectrum on existing sites and the roll-out of some new sites.
VIL said that the small capex roll-out boosted its network capacity by about 15 per cent and an increase in population coverage by 16 million by end September, 2024.
The company claimed that it has started witnessing an improvement in customer experience in select geographies where these roll-outs have been completed.
VIL holds a large spectrum portfolio including mid-band 5G spectrum in 17 circles and milimetreWave 5G spectrum in 16 circles.
After the Rs 24,000 crore fundraise, including Rs 18,000 crore through a follow-on offer, the company was reeling under the debt of around Rs 2.14 lakh crore.
The company had payment obligations of Rs 2,09,520 crore towards the government as of June 30, 2024, which included the deferred spectrum payment obligations and adjusted gross revenue liability.
Post Rs 24,000 crore fundraise, VIL promoters Aditya Birla Group and Vodafone hold 37.3 per cent and the government 23.2 per cent stake in the company.
