Vodafone Idea awards Rs 30k-cr contracts for 4G, 5G gear supply for 3 years

India's Vodafone Idea on Sunday concluded a $3.6 billion deal with mobile and network manufacturers Nokia, Ericsson and Samsung for supply of equipment over a period of three years, it said in a statement to exchanges.

"The deal marks the first step towards the roll-out of the company's transformative three-year capex plan of $6.6 billion (550 billion rupees)," the company said.

"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," it said.

Vodafone Idea, formed by a merger between the Indian arm of UK's Vodafone Group and Aditya Birla Group's Idea Cellular in 2018, has posted a loss in every quarter as it lost market share to larger rivals Bharti Airtel and Reliance Jio.

 

Earlier in 2024, the company sold shares to institutional investors, raised funds through the country's largest-ever follow-on public offer and is also in talks with lenders as part of its plans to raise around $5 billion to roll out 5G network service, expand 4G coverage and regain market share.

Supplies under the new contract will start arriving in the coming quarter, Vodafone Idea said, adding that its top priority remains to expand the 4G coverage.

"The Capex is currently being funded out of the equity raise. For the long-term Capex, the company is in advanced stage of discussions with its existing and new lenders to tie up Rs 25,000 crore of funded and Rs 10,000 crore of non-fund-based facilities," Chief Executive Officer Akshaya Moondra said.

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. Vodafone Idea shares are down over 40 per cent so far this quarter.

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