Vodafone Idea Limited (VIL) has just announced that it concluded a mega $3.6 billion mega-deal with Nokia, Ericsson, and Samsung for the supply of network equipment over a period of three years. This aligns with the company's plan to spend Rs 55,000 crore ($6.6 billion) on capex over the next three years. This deal also brings in Samsung which has been working with other telcos like Airtel already.
Vi said that the capex plan is geared to expand 4G coverage in India and also launch 5G in key cities of India. With this deal, Vi will upgrade its networks to offer a much better experience to its consumers than now. The telecom operator has already deployed the 900 MHz band spectrum in many circles of India for the first time to improve coverage. The recent fundraising will allow Vi to modernise existing infrastructure and deploy sites and cells in more areas for blanket network coverage.
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Vi said that the new equipment will improve efficiency gains and lower operating costs. The company has confirmed that its top priority right now is to expand the 4G coverage to 1.2 billion Indians. With the recent improvements in the network, Vi said that it has seen a 15% boost in capacity and an increase in population coverage by 16 million.
The current capex is being funded by the equity raise, which is what investors would like to see. If the telco had used the money to pay off debt, that wouldn't have helped in the long term. Apart from the equity raise, Vi is also looking to raise more funds through debt.
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"We are committed to invest 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," said Akshaya Moondra, CEO of Vodafone Idea.
