Vodafone Idea (VIL) has concluded a $3.6 billion (₹30,000 crore) deal with Nokia, Ericsson and Samsung to supply it network equipment over three years.
The deal is the first step towards the rollout of the telco’s three-year capex plan of $6.6 billion (₹55,000 crore).
These investments will be directed towards expanding its 4G population coverage to 1.2 crore from 1.03 crore, launching 5G in key markets and capacity expansion in line with data growth.
VIL said it has continued with its existing long-term partners Nokia and Ericsson and onboarded Samsung.
These contracts are expected to allow VIL to quickly capitalise on the latest state-of-the-art equipment to offer enhanced customer experience, thereby retaining existing customers and bringing in new subscribers.
VIL, which has seen subscriber losses, had recently raised equity funding of about ₹24,000 crore.
It had also acquired an additional spectrum worth ₹3,500 crore.
A monthly subscriber report recently released by the Telecom Regulatory Authority of India (Trai) showed Vodafone Idea losing 1.41 million subscribers in July.
Its two other rivals — Jio and Bharti Airtel — also witnessed a fall in subscribers, attributed to the tariff increase of 10-27 per cent in July.
On the new deal, VIL said the learnings and insights obtained by the vendors in the Indian market over the last two years will enable it to embark on a more flexible and modular rollout plan by customising the services for all advanced technologies that include 4G and 5G.
After the equity raise and additional spectrum acquisition in the June 2024 auction, VIL said that it had executed some `quick win capex’, while simultaneously working on concluding these long-term contracts.
These quick wins were by way of deployment of more spectrum on existing sites and also the rollout of some new sites.
According to the company, this is resulting in around 15 per cent boost in capacity and an increase in population coverage by 16 million by end September 2024.
``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,’’ Akshaya Moondra, CEO, Vodafone Idea Ltd, said.
"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.’’
VIL disclosed it is presently utilising the equity raise proceeds for capital expenditures and is engaged in advanced discussions with existing and new lenders to secure ₹25,000 crore in funded facilities and ₹10,000 crore in 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.
The report has been submitted to all the banks and financial institutions.
Announcement of the deals comes on the eve of VIL holding an analyst meet amid market concerns over the impact of the Supreme Court judgement on adjusted gross revenue (AGR).
VIL’s statement that banks will now proceed with their internal evaluation of its debt proposal suggests that the company does not expect any hurdles at this stage.
