India’s Vodafone Idea lands $3.6 billion network equipment deal

By Swati Bhatt

MUMBAI (Reuters) – India’s Vodafone Idea on Sunday struck a $3.6 billion deal with mobile phone and network makers Nokia, Ericsson and Samsung to supply equipment over a three-year period, it said in a statement to the stock exchanges.

“The deal marks the first step towards the launch of the company’s three-year investment plan of $6.6 billion (550 billion rupees),” the company said.

“The capex program is aimed at expanding 4G population coverage from 1.03 billion to 1.2 billion, rolling out 5G in key markets and expanding capacity in line with data growth,” it said.

Vodafone Idea, formed from a merger between UK-based Vodafone Group’s Indian arm and Aditya Birla Group’s Idea Cellular in 2018, posted a loss every quarter as it lost market share to larger rivals Bharti Airtel and Reliance Jio.

In early 2024, the company sold shares to institutional investors, raised funds through the country’s largest subsequent public offering and is also in talks with lenders as part of its plans to raise about $5 billion to launch 5G network service, expand. 4G coverage and regain market share.

Deliveries under the new contract will start arriving in the next quarter, Vodafone Idea said, adding that its top priority remains expanding 4G coverage.

“Capex is currently funded by capital raising. For long-term Capex, the company is in an advanced stage of discussions with existing and new lenders to tie up 250 billion rupees of funding and 100 billion rupees of non-funding. facilities based on,” said executive director Akshaya Moondra.

On Thursday, India’s top court rejected a request by telecom companies, including Vodafone Idea, to recalculate the dues they owed the government and sent shares tumbling. Shares of Vodafone Idea have fallen over 40% so far this quarter.

Analysts at ICRA estimate that Vodafone Idea and Bharti Airtel owe 1 trillion rupees ($12 billion) in past dues, including spectrum fees and license fees. They did not provide estimates for other firms.

(Reporting by Swati Bhat; Editing by Tom Hogue)