The deal includes the supply of both 4G and 5G network equipment over the next three years
This week, Vodafone Idea has concluded a $3.6 billion telecoms equipment deal with Ericsson, Nokia, and Samsung.
The deal will see the trio of vendors provide Idea with equipment over the next three years. Idea will use this equipment to expand its 4G population coverage from 1.03 billion to 1.2 billion, as well as launching 5G in selected markets and expanding existing capacity.
Idea says this will not only allow the company to offer more advanced mobile services to a wider audience, but will also improve the network’s power efficiency, thereby delivering cost savings.
The deal is notably the first time Idea has worked with Samsung for networking equipment. Ericsson and Nokia, on the other hand, are both long-term partners with Idea; in fact, earlier this year, Idea issued $294.2 million in shares to the two companies in order to settle existing debts with them. This gave Nokia and Ericsson 1.5% and 0.9% stakes in Idea, respectively.
“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,” said Vodafone Idea CEO Akshaya Moondra. “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 is funded via the $4.4 billion Idea raised in April and May via equity financing.
Vodafone Idea has been struggling to compete in the Indian market and has teetered on the edge of bankruptcy for years. Despite managing to raise funds earlier this year, the company continues to bleed subscribers to its rivals Reliance Jio and Bharti Airtel.
The company is notably behind rivals when it comes to the rollout of 4G and, unlike Airtel and Jio, has yet to commercially launch 5G at scale.
To make matters worse, Idea is drowning under the weight of billions of dollars it owes the government a part of Adjusted Gross Revenue (AGR) payments from 2019. Last week, the Indian Supreme Court rejected appeals to recalculate the AGR dues, news which sent Idea’s share price plummeting by 15%.Vodafone Idea is currently attempting to raise yet more cash, both to meet its debt obligations and to upgrade its infrastructure in an effort to become competitive. Vodafone Idea strikes $3.6bn deal with Nokia, Ericsson, and Samsung
