Vodafone Idea (Vi), the third-largest telecom operator in India is likely going to award network deals to South Korean Samsung. Samsung has not yet found its footing in India for the telecom business. Yes, Samsung helped Jio in its early years, but since then, it has either been the Chinese vendors or the European vendors who have seen growth in the telecom business in India. Earlier this year, Samsung started manufacturing telecom gear locally and was also in talks with the telecom players to build partnerships.
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Now, Vodafone Idea might award the network upgrade contract to Samsung instead of its old partners including Nokia and Ericsson. Vodafone Idea has to upgrade the network gear that it acquired from the Chinese vendors. In telecom circles including Bihar, Punjab, Odisha, and Karnataka, Vodafone Idea is expected to award Samsung a contract estimated at around $70 million. This will include logistics and labour costs, according to an ET report.
Some of the financial negotiations are still happening between the companies. This is expected to be winded up soon. The report said that Samsung has pushed Vi to furnish bank guarantees/letters of credit to minimise its risk of working with the operator. Vi has a ton of debt in its books, and plenty of it is towards the vendors.
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Nokia and Ericsson are unlikely to work in credit with Vodafone Idea. Thus, Samsung is a great choice for the telecom operator. This will help Samsung establish a larger presence in the Indian market while Vodafone Idea will be able to upgrade its networks. The report also mentioned that Samsung is looking to supply 4G gear to Vi in circles where Nokia and Ericsson are already partners of Vi.
