Vodafone Idea Limited (VIL), the third-largest telecom operator in the country, is going to close equipment deals with Ericsson and Samsung soon. This deal will be worth Rs 16,500 crore. Ericsson will get a Rs 13,200 crore order from Vi while Samsung will get a Rs 3300 crore deal. It is worth noting that Vi recently announced Nokia as its largest vendor partner and closed an equipment deal worth Rs 13,500 crore with the Finnish company. These deals will help Vodafone Idea Limited in upgrading its network infrastructure. The telco has plans to add new 4G sites along with upgrading the existing sites to reach more population.
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Additionally, Vi will roll out 5G with the help of these vendors. The telco will start with 5G NSA (non-standalone architecture). This deal with Ericsson and Samsung has not yet been announced officially. ET reported that Vi is close to finalising these deals with the named companies. Ericsson is likely to work with Vodafone Idea in 10 markets - Delhi, Rajasthan, J&K, Himachal Pradesh, Northeast, Maharashtra, Kerala, Assam, and Madhya Pradesh.
Samsung's share will be lesser here and the South Korean tech giant will be offering its gears in three markets including Punjab, Karnataka, and Bihar. Most of the consumers of Vi stay in the circles where Nokia is providing the gear. Thus, in the coming years, it is likely that Nokia will do more business with Vodafone Idea compared to Ericsson.
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Vi is funding this capex from the money raised through FPO (follow on public offer) and promoters. The revenues that the company will generate will go towards paying off liabilities. The telco is expecting some relief from the government on the adjusted gross revenue (AGR) matter. Vi's stock has plummetted more than 30% over the last month as the supreme court decided not to entertain the plea for recalculating the AGR dues.
