Vodafone Idea has concluded a mega $3.6 billion (~₹30,000 crore) deal with Nokia, Ericsson and Samsung, for the supply of network equipment over three years. The deal marks the first step towards the rollout of the company’s transformative three-year capex plan of $6.6 billion. The moves come just days after the Supreme Court rejected a plea to review the order on AGR payments.
The capex programme is directed towards expanding the 4G population coverage from 1.03 billion to 1.2 billion, launching 5G in key markets and capacity expansion in line with data growth. The company has continued with its existing long-term partners Nokia and Ericsson and also onboarded Samsung as a new partner.
“These contracts will allow the Company to quickly capitalize on the latest state-of-the-art equipment to offer enhanced customer experience. Further, the learnings and insights obtained by the vendors in the Indian market over the last two years will enable the company to embark on a more flexible and modular rollout plan by customising the services for all advanced technologies (4G & 5G). In addition, the new equipment will also lead to efficiency gains in energy and thus lower operating costs. The supplies against these new long-term awards will start in the coming quarter, “ the company said in a press release.
Akshaya Moondra, CEO, Vodafone Idea Limited, said “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. 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 capex is currently being funded out of the equity raise the company did recently. For the long-term capex, the company is in an advanced stage of discussions with its existing and new lenders to tie up ₹25,000 crore of funded and ₹10,000 crore of non-fund-based facilities. One of the major steps in this process was the completion of a techno-economic evaluation of the company’s long-term projections by an independent third party, which was recently completed. The report has been submitted to all the banks and financial institutions. Basis this report the banks will now progress with their internal evaluation and approval processes.