Vodafone Idea finalizes a $3.6 billion network equipment agreement with Nokia, Ericsson, and Samsung.

On Sunday, 22nd Sep, India's Vodafone Idea announced the completion of a $3.6 billion (approximately ₹30,066 crore) deal with Nokia, Ericsson, and Samsung for the supply of network equipment over the next three years, according to a statement to the exchanges.

This agreement is the initial step in the company's ambitious three-year capital expenditure plan of $6.6 billion (₹550 billion). The capex program aims to increase 4G population coverage from 1.03 billion to 1.2 billion, launch 5G in key markets, and expand capacity to accommodate data growth.

Vodafone Idea, formed from the merger of the UK’s Vodafone Group's Indian operations and Aditya Birla Group's Idea Cellular in 2018, has reported losses in every quarter as it continues to lose market share to larger competitors like Bharti Airtel and Reliance Jio.

Earlier in 2024, the company raised funds by selling shares to institutional investors and through the country's largest-ever follow-on public offer. It is also in discussions with lenders to secure around $5 billion (approximately ₹41,762 crore) for expanding 5G services, enhancing 4G coverage, and reclaiming market share.

Under the new contract, supplies are expected to begin arriving in the coming quarter, with a primary focus on expanding 4G coverage. "The capex is currently funded from the equity raise. For long-term capex, the company is in advanced discussions with existing and new lenders to secure ₹250 billion in funded facilities and ₹100 billion in non-fund-based facilities," said CEO Akshaya Moondra.

Recently, India's top court denied a request from telecom companies, including Vodafone Idea, to recalculate the dues owed to the government, resulting in a drop in share prices. Vodafone Idea's shares have declined over 40% this quarter.

Analysts at ICRA estimate that Vodafone Idea and Bharti Airtel collectively owe around ₹1 trillion ($12 billion) in past dues, which includes spectrum charges and licensing fees, though estimates for other companies were not provided.