NEW DELHI: Vodafone Idea Limited (VIL), India's third-largest telecom service provider, announced a deal worth $3.6 billion (approximately Rs. 300 billion) with Nokia, Ericsson, and Samsung for network equipment supply over three years.
The company said that the deal initiates VIL's three-year capital expenditure plan of approximately $6.6 billion (Rs. 550 billion), aiming to expand 4G coverage, launch 5G in key markets.
VIL has continued its partnerships with existing long-term partners Nokia and Ericsson while also onboarding Samsung as a new partner.
Vodafone Idea, the cash-strapped telecom operator, is the only private company yet to launch its commercial 5G network in India, despite acquiring 5G spectrum two years ago. In contrast, competitors Reliance Jio and Bharti Airtel are rapidly expanding their 5G networks and have nearly covered the entire country.
Vodafone Idea's cash crunch has hindered its ability to expand its 4G network, leading to a decline in customers due to insufficient 4G coverage and no 5G network.
According to the Telecom Regulatory Authority of India, Vodafone Idea lost 1,413,910 subscribers and held an 18.46% market share dip as of July 2024.
Vodafone Idea emphasized that its top priority is to expand 4G coverage to 1.2 billion Indians. Following its recent equity raise of Rs. 240 billion and an additional spectrum acquisition of Rs. 35 billion in the June 2024 auction, the company has initiated quick-win capital expenditure projects. These include deploying more spectrum on existing sites and rolling out new sites, resulting in a 15% capacity boost and an increase in population coverage by 16 million by September 2024. Currently, the Capex is funded through the equity raise.
In the first quarter of FY2024-25, Vodafone Idea reported a consolidated net loss of Rs. 6,432 crore. However, the company improved its average revenue per user (ARPU) to Rs. 146, up from Rs. 139 a year ago.