Vodafone Idea (Vi) can only launch 5G by November - December 2023 in the earliest scenario, said an executive working with one of the major gear vendors. But for that, the telco will have to place a purchase order for the equipment right now. But the only condition for Vi here is that there won't be any facility of credit. According to an ET Telecom report, Ericsson and Nokia have made it clear to Vi that they won't be supplying 5G equipment on credit. The telco already owes thousands of crores to the vendors in debt. Vi wanted a scenario where the payment terms could be relaxed, but it isn't likely going to happen as the vendors won't expose themselves further to the company.
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As per the report, Vi is also in discussions with Open RAN suppliers Mavenir and Samsung for getting 5G equipment. The telco is undertaking 5G trials with Mavenir in the Karnataka circle. Nokia and Ericsson are the vendors that are majorly supplying 5G equipment to Reliance Jio and Bharti Airtel. Jio is also reportedly making moves to raise $1.6 billion to purchase more 5G equipment from Nokia.
In case Vi is able to place a purchase order right now, the telco will be able to roll out 5G by the year-end. So if it doesn't do that now, it means that India will have to wait for the telco's 5G until 2024. If Vi places a purchase order, the vendors would expand their production capacity to meet the demand.
Nokia already manufactures in India, while Ericsson gets its products manufactured at the facility of Jabil. Vi needs to figure out its fundraising plans fast in order to be able to place a 5G equipment order with the vendors. There were reports that Vi is going to raise around Rs 20,000 crore soon from private equity players.
One thing worth noticing over here is that Vi won't be able to meet the minimum 5G rollout obligations set by the government. Would that mean heavy penalties, or will the telco be forced to return the spectrum? We will have to wait and watch.
