Vodafone Idea Partners with Nokia, Ericsson, and Samsung for Major Network Expansion

On September 22, 2024, Vodafone Idea Limited (VIL) concluded a substantial deal worth approximately USD 3.6 billion (around ₹300 billion) with leading global telecom equipment providers Nokia, Ericsson, and Samsung. This agreement marks a significant milestone in Vodafone Idea’s three-year capital expenditure (capex) plan, valued at approximately USD 6.6 billion (₹550 billion). The capex program is aimed at bolstering the company’s 4G and 5G network infrastructure, enhancing coverage, and addressing the rising demand for data services across India.

The partnership with Nokia and Ericsson, long-term collaborators of Vodafone Idea, remains intact, while the addition of Samsung as a new partner signals the company’s intent to diversify and expand its vendor base. These contracts will enable the telecom giant to utilise cutting-edge network equipment that improves operational efficiency and enhances the overall customer experience. The agreement is part of Vodafone Idea’s strategy to expand its 4G population coverage from the current 1.03 billion to 1.2 billion and launch 5G services in key markets, helping the company meet the growing data demands of its user base.

Incorporating advanced technologies in both 4G and 5G, the new equipment from these vendors will allow Vodafone Idea to adopt a flexible and modular rollout plan, tailored to the specific needs of the Indian telecom market. The use of energy-efficient equipment is expected to lead to reduced operating costs over time, further supporting the company’s sustainability goals.

The supply of this new equipment is expected to commence in the next quarter, with immediate plans focused on increasing 4G coverage to reach 1.2 billion users. Following Vodafone Idea’s recent ₹240 billion equity raise and an additional ₹35 billion spectrum acquisition in June 2024, the company has already implemented several “quick win” capex initiatives, including the deployment of additional spectrum on existing sites and the rollout of new sites. 

These efforts are expected to increase network capacity by 15% and expand population coverage by 16 million by the end of September 2024. In regions where these rollouts have been completed, the company has already observed improvements in customer experience.

Currently, Vodafone Idea’s capex is being funded by the recent equity raise. For its long-term capex needs, the company is in advanced discussions with both existing and new lenders to secure ₹250 billion in funded facilities and ₹100 billion in non-fund-based facilities. A techno-economic evaluation conducted by an independent third party has been completed and submitted to banks, enabling them to proceed with internal evaluations and approvals for long-term financing.

Commenting on the deal, the CEO of Vodafone Idea Limited, Akshaya Moondra, said, “We are committed to investing in emerging network technologies to provide a best-in-class experience to our customers. We have kickstarted the investment cycle. 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. Nokia and Ericsson have been our partners since our inception, and this marks another milestone in that continuing partnership. We are pleased to start our new partnership with Samsung. We look forward to work closely with all our partners as we move into the 5G era.”

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