Vodafone Idea concludes $3.6 billion network equipment deal

Debt-ridden Vodafone Idea has concluded a ₹300 billion (USD 3.6 billion) agreement with Nokia, Ericsson and Samsung, for the supply of network equipment over a period of three years.

While continuing with its existing long-term partners Nokia and Ericsson, the Indian telecom operator has onboarded Samsung as a new partner. 

Nokia and Ericsson converted part of their dues that Vodafone Idea owes them into equity. Samsung has been providing gear to rival Bharti Airtel.

“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 of 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. We look forward to work closely with all our partners as we move into the 5G era.”

The deal marks the first step towards the rollout of the company’s three-year capex plan of USD 6.6 billion directed towards expanding the 4G population coverage, launching 5G in important markets and capacity expansion.  

The company said the new equipment will lead to efficiency gains in energy and lower operating costs. Its top priority, however, is to expand the 4G coverage to 1.2 billion Indians from the existing 1.03 billion.

Formed by a merger between the Indian arm of UK’s Vodafone Group and Aditya Birla Group’s Idea Cellular in 2018, Vodafone Idea has posted a loss in every quarter, losing market share to rivals Bharti Airtel and Reliance Jio.

Vodafone Idea is saddled with a debt of ₹2.1 trillion, of which ₹1.39 trillion is for deferred spectrum and ₹703 billion in AGR dues.