Vodafone Idea Favours Chinese Vendors Over European Providers for 4G Expansion

As Vodafone Idea Limited works upon its plan of expansion of the 4G network, the newly merged telco has finalised contracts for equipment deployment with Chinese equipment vendors Huawei and ZTE. This has come at the cost of lower purchase orders for the European equipment vendors like Nokia and Ericsson. This move has happened in the light of Vodafone Idea Ltd focusing on lowering the costs As per a report by ET, the battle for the overall contract which was worth $1.3-1.4 billion (Rs 9,230-9,940 crore) was between Chinese vendors and European vendors.

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ZTE and Huawei Bag 35% of All VIL Circles

Now that the contract has been signed, it is clear that the Finnish vendor Nokia and the Swedish vendor Ericsson will now amount for around 65% of total equipment deployment, whereas Chinese vendors ZTE and Huawei will take care of the rest 35% of the equipment supply for the telco. People aware of the matter had remarked that this change in collective composition down from 80% which was the figure before for European vendors came down as Chinese vendors offered better pricing and flexibility in payment terms for Vodafone Idea. On the other hand, Nokia and Ericsson were adamant on payment right after deployment and also quoted higher prices.

The telco which finalised its merger late in August has been on a fast track execution with the clock ticking. The telco had also reported heavy losses in its recent quarterly report, and to improve its financials the company now seeks to expand its 4G coverage in the country while it competes with the former market leader, Bharti Airtel and the Mukesh Ambani led telco, Reliance Jio. Not only this, but Vodafone Idea has also expressed that it would transition its 2G and 3G spectrum for 4G network.