Vodafone-Idea closes $3.6 billion network equipment deal
India’s Vodafone Idea on Sunday entered into a $3.6 billion (approximately Rs 30,066 crore) deal with mobile and network makers Nokia, Ericsson and Samsung for the supply of equipment over a period of three years, the company said in a statement to stock exchanges.
“The deal marks the first step towards the rollout of the company’s transformative three-year capex plan worth $6.6 billion (Rs. 550 billion),” the company said.
“The capex program is aimed at expanding 4G coverage of the population from 1.03 billion to 1.2 billion, launching 5G in key markets and expanding capacity in line with data growth,” the report said.
Vodafone Idea, formed through a merger between the Indian arm of Britain’s Vodafone Group and the Aditya Birla Group’s Idea Cellular, has been reporting losses 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 money through the largest-ever follow-on offering in the country and is in talks with lenders as part of plans to raise about $5 billion (approximately Rs 41,762 crore) to roll out 5G network services, expand 4G coverage and regain market share.
Vodafone Idea said deliveries under the new contract will begin in the coming quarter and said its top priority is to expand 4G coverage.
“The Capex is currently being funded from the capital raise. For the long-term Capex, the company is in advanced stages of discussions with its existing and new lenders to commit Rs 250 billion of funded and Rs 100 billion of non-fund based facilities,” Chief Executive Officer Akshaya Moondra said.
On Thursday, India’s Supreme Court rejected a plea by telecom companies including Vodafone Idea to recalculate amounts owed to the government, sending shares tumbling. Vodafone Idea shares have fallen more than 40 percent so far this quarter.
Analysts at ICRA estimate that Vodafone Idea and Bharti Airtel owe 1 trillion rupees ($12 billion) in arrears, including spectrum charges and license fees. They did not provide estimates for other companies.
© Thomson Reuters 2024
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
