With excellent timing – considering last week’s downbeat headlines about AGR dues – Indian operator Vodafone Idea has announced the conclusion of what it quite reasonably describes as a US$3.6 billon megadeal with three global network partners.
The deal – with Nokia, Ericsson and Samsung – is for the supply of network equipment over a period of three years. It’s described as part of the company’s three-year capex plan involving a sum of about US$6.6 billion. The capex programme, says Vodafone Idea, is directed towards expanding 4G population coverage from 1.03 billion to 1.2 billion, launching 5G in key markets and pursuing capacity expansion in line with data growth.
The company says it has continued with its existing long-term partners Nokia and Ericsson and also onboarded Samsung as a new partner. It adds that the supplies against these new long-term awards will start in the coming quarter. The main focus will be on expanding 4G coverage to 1.2 billion Indians.
According to India’s Economic Times, Vodafone idea will allocate 40% each of the deal to Ericsson and Nokia, with the remaining 20% going to Samsung. The same source notes that Vodafone Idea shares surged nearly 10% on the news.
It’s certainly a significant step for the company given its own financial issues and subscriber losses, not to mention the progress of rivals Reliance Jio and Bharti Airtel’s in both 4G and 5G to date. Indeed, Bharti Airtel is reportedly planning to invest US$1 billion in capex over three years to expand its 4G coverage.
Vodafone Idea made less desirable headlines last week after India’s Supreme Court dismissed its plea for reduced AGR dues, upholding the full amount of the AGR demand, despite the operator’s hope for a US$4.6 billion reduction.
