India's Vodafone Idea concludes $3.6 bln network equipment deal
By Swati Bhat
MUMBAI, Sept 22 (Reuters) -India's Vodafone Idea on Sunday concluded a $3.6 billion deal with mobile and network manufacturers Nokia NOKIA.HE, Ericsson ERICb.ST and Samsung 005930.KS for supply of equipment over a period of three years, it said in a statement to exchanges.
"The deal marks the first step towards the roll-out of the company's transformative three-year capex plan of $6.6 billion (550 billion rupees)," the company said.
"The capex programme is directed towards expanding the 4G population coverage from 1.03 billion to 1.2 billion, launching 5G in key markets and capacity expansion in line with data growth," it said.
Vodafone Idea VODA.NS, formed by a merger between the Indian arm of UK's Vodafone Group VOD.L and Aditya Birla Group's Idea Cellular in 2018, has posted a loss in every quarter as it lost market share to larger rivals Bharti Airtel BRTI.NS and Reliance Jio.
Earlier in 2024, the company sold shares to institutional investors, raised funds through the country's largest-ever follow-on public offer and is also in talks with lenders as part of its plans to raise around $5 billion to roll out 5G network service, expand 4G coverage and regain market share.
Supplies under the new contract will start arriving in the coming quarter, Vodafone Idea said, adding that its top priority remains to expand the 4G coverage.
"The Capex is currently being funded out of the equity raise. For the long-term Capex, the company is in advanced stage of discussions with its existing and new lenders to tie up 250 billion rupees of funded and 100 billion rupees of non-fund-based facilities," Chief Executive Officer Akshaya Moondra said.
On Thursday, India's top court rejected a request by telecom companies including Vodafone Idea to recalculate the dues they owed the government and sent shares tumbling. Vodafone Idea shares are down over 40% so far this quarter.
Analysts at ICRA estimate that Vodafone Idea and Bharti Airtel owe 1 trillion rupees ($12 billion) in past dues, including spectrum charges and licensing fees. They did not provide estimates for other firms.
Reporting by Swati Bhat; Editing by Tom Hogue
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
