Vodafone Idea signs $3.6 Bn deal with Nokia, Ericsson, and Samsung for network equipment supply

Vodafone Idea Limited (VIL), India's third-largest telecom service provider, on Sunday, announced a deal worth $3.6 billion (approximately Rs. 300 billion) with Nokia, Ericsson, and Samsung for network equipment supply over three years.

This marks the first step towards the rollout of the company’s three-year capex plan of $6.6 billion, which is directed towards expanding the 4G population coverage from 1.03 billion to 1.2 billion, launching 5G in key markets and expanding capacity in line with data growth.

The announcement comes only days after India’s second-largest telco Bharti Airtel reportedly plans to issue orders worth around $1 billion to Ericsson, Nokia, and Samsung for 4G network equipment over the next three years, according to The Economic Times.  
The new contracts are intended to accelerate the transition of Airtel’s feature phone users to smartphones and enhance revenue per user, the report said.

“We are committed to investing in emerging network technologies to provide a best-in-class experience to our customers. We have kicked off the investment cycle,” Akshaya Moondra, CEO of Vodafone Idea Limited, said in a statement.

The company has maintained its long-term partnerships with Nokia and Ericsson while welcoming Samsung as a new collaborator after successful trials of Samsung's vRAN technology.

“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… We look forward to working closely with all our partners as we move into the 5G era,” Moondra added.

Since April, Vodafone Idea has ordered network upgrades from both Nokia and Ericsson in key regions. Both vendors, facing declining sales due to reduced 5G investments, will benefit from these contracts, while Samsung seeks to expand its presence in India after securing a minor contract with Bharti Airtel and previously supplying 4G equipment to Reliance Jio.

The telco, which has 200 million subscribers, has contacted new lenders, including public sector non-banking financial companies (NBFCs).

“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,” the telco said in a statement.

As of Q1 2024-25, Vodafone-Idea's net debt was $28 billion, including an $8.5 billion Adjusted Gross Revenue (AGR) liability, of which 20% is principal and the rest is interest and penalties.