News Mania Desk/ Piyal Chatterjee / 22nd September 2024
Over the next three years, Vodafone Idea plans to spend $3.6 billion (about ₹30,000 crore) on network equipment. Nokia, Ericsson, and Samsung have been awarded contracts for this work, the third-largest carrier in India announced on Sunday.Having converted a portion of their debt that Vi owes them into shares, longtime suppliers to the indebted carrier Nokia of Finland and Ericsson of Sweden are now shareholders. Major South Korean electronics manufacturer Samsung has also been supplying rival Bharti Airtel with equipment.
Those with knowledge of the specifics of the agreement said that the contracts will probably be divided evenly among the three manufacturers of telecom equipment.
A recent equity offering of around ₹24,000 crore, including ₹18,000 crore Vi received from the largest follow-on public offer in the country in April, has been used to pay the contracts. Despite a five-month gap between the company’s funding raise and the announcement of the transactions, Mint revealed this week that Vi was almost done finalizing contracts with vendors.Beginning in the upcoming quarter, supplies will be made against these new long-term rewards.
The agreement is the first phase of the company’s ₹55,000 crore ($6.6 billion) three-year capital expenditure strategy, which aims to introduce 5G in important markets and increase the coverage of 4G from 1.03 billion to 1.2 billion people.
Vi intends to acquire state-of-the-art equipment to provide an improved customer experience. Additionally, the company will leverage important insights gathered over the previous two years from vendors in the Indian industry. This will allow the telco to tailor its services for 4G and 5G technologies, allowing for a more adaptable and modular rollout strategy. The new machinery will also result in increased energy efficiency and decreased running expenses.
Reaching 1.2 billion Indians with 4G coverage is the company’s top aim. According to Moondra, Vi has expanded the spectrum on its already-existing sites and launched a few new ones, increasing capacity and population coverage by roughly 15%.
Vodafone Idea has been attempting to obtain capital since September 2020, but due to a lack of cash, it was unable to make investments in expanding its 4G network. Despite purchasing spectrum in 2022, it was unable to roll out 5G, as competitors Jio and Airtel blanketed the entire nation in 18 months starting in October 2022. With ₹2.1 trillion in debt, the losing Vodafone Idea is burdened with ₹1.39 trillion in postponed spectrum and ₹70,300 crore in adjusted gross revenue (AGR) obligations.
