Vodafone Idea's shares will be closely watched on September 23 after the telecom operator signed a massive $3.6 billion (approximately Rs 30,000 crore) contract with Nokia, Ericsson, and Samsung to supply network equipment over three years.
The agreement is the first step in the company's $6.6 billion three-year capex plan, which will be used to increase 4G population coverage from 1.03 billion to 1.2 billion, launch a 5G network in key markets, and expand capacity in line with data growth.
"We are on our VIL 2.0 journey, and from now on, VIL will stage a smart turnaround to effectively participate in industry growth opportunities." Nokia and Ericsson have been our partners since our start, and today represents another milestone in their ongoing cooperation. We are thrilled to begin our new cooperation with Samsung. "We look forward to working closely with all of our partners as we transition to the 5G era," said Akshaya Moondra, CEO of Vodafone Idea, in an exchange filing. The telecom operator has expanded its capacity with current long-term partners Nokia and Ericsson, as well as a new partner in Samsung.
Vodafone Idea further stated that the lessons obtained by these three suppliers in the Indian market over the last two years will allow for a more adaptable, modular deployment strategy geared to new technologies such as 4G and 5G.
The new technology will not only improve energy efficiency, but will also help the telecom operator save money on operations. Deliveries under these long-term contracts are expected to commence in the coming quarter, with the company's primary goal of increasing 4G service to reach 1.2 billion Indians.
Meanwhile, Vodafone Idea is financing its current capex through an equity issue. In contrast, for its long-term objectives, the company is in advanced talks with both existing and new lenders to acquire Rs 25,000 crore in financed facilities and another Rs 10,000 crore in non-fund-based support.
