Shares of Vodafone Idea soared 8 percent on September 23 after the telecom operator inked a mega $3.6 billion (roughly Rs 30,000 crore) deal with Nokia, Ericsson, and Samsung for the supply network equipment over three years.
At 09.16 am, shares of the telecom operator were trading at Rs 11.16 on the NSE.
The deal makes up the first stepping stone of the company's three-year capex plan worth a total of $6.6 billion which will be directed towards the expansion of its 4G population coverage from the current 1.03 billion to 1.2 billion, launch of its 5G network across key markets and a capacity expansion aligned with its data growth.
“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,” Akshaya Moondra, CEO of Vodafone Idea, said in an exchange filing.
The telecom operator has relied on its existing long-term partners, Nokia and Ericsson for its capacity expansion while also onboarding a new partner in the form of Samsung.
Moneycontrol also reported citing sources that Nokia has secured over 50 percent of the deal in terms of volumes, while Ericsson bagged around 40 percent share, with the remainder landing in the hands of Samsung.
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Vodafone Idea also remarked that the insights these three vendors have gained in the Indian market over the past two years will allow for a more adaptable, modular rollout plan tailored for advanced technologies like 4G and 5G. The new equipment will not only boost energy efficiency but also help cut operating costs for the telecom operator. Deliveries from these long-term contracts are set to begin in the coming quarter, with the company's primary focus on expanding 4G coverage to reach 1.2 billion Indians.
Meanwhile, Vodafone Idea's current capex is being financed through an equity raise. In contrast, for its long term plans, the company is in advanced discussions with both existing and new lenders to secure Rs 25,000 crore in funded facilities and an additional Rs 10,000 crore in non-fund-based support.
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