Vodafone Idea (VIL) has finalized a $3.6 billion (₹30,000 crore) agreement with Nokia, Ericsson, and Samsung to supply network equipment over the next three years. This marks the first phase of the company’s broader $6.6 billion (₹55,000 crore) capital expenditure plan. The investments will focus on expanding its 4G population coverage from 103 million to 120 million, rolling out 5G in key regions, and increasing capacity to accommodate growing data demand.

VIL has maintained its long-term partnerships with Nokia and Ericsson while bringing Samsung onboard as a new supplier.

These contracts are expected to enable Vodafone Idea (VIL) to rapidly leverage cutting-edge equipment, improving customer experience to help retain current subscribers and attract new ones. VIL, which has been experiencing subscriber losses, recently secured around ₹24,000 crore in equity funding and acquired additional spectrum valued at ₹3,500 crore.

According to a recent report by the Telecom Regulatory Authority of India (Trai), VIL lost 1.41 million subscribers in July. Competitors Jio and Bharti Airtel also saw subscriber declines, largely due to a 10-27% tariff hike during the same period.

Vodafone Idea (VIL) stated that the new deal will benefit from vendors’ learnings and insights gained in the Indian market over the past two years, allowing for a more flexible and modular rollout strategy. This approach will enable the company to tailor services for advanced technologies, including 4G and 5G. Following its equity raise and additional spectrum acquisition during the June 2024 auction, VIL implemented several “quick win capex” initiatives, such as deploying additional spectrum on existing sites and rolling out new sites.

These efforts have led to a 15% capacity boost and an expansion in population coverage by 16 million, expected by the end of September 2024.

“We are committed to investing in emerging network technologies to deliver a top-tier experience to our customers. We’ve initiated the investment cycle and are embarking on VIL 2.0, aiming for a smart turnaround to seize industry growth opportunities,” said Akshaya Moondra, CEO of Vodafone Idea Ltd.

He highlighted that while Nokia and Ericsson have been longstanding partners, this new phase marks the beginning of a partnership with Samsung as well. VIL is currently utilizing its equity raise funds for capital expenditures and is in advanced discussions with both current and new lenders to secure ₹25,000 crore in funded facilities and ₹10,000 crore in non-fund-based facilities.

A key milestone in this process was the completion of an independent third-party techno-economic evaluation of the company’s long-term projections, which has been submitted to banks and financial institutions. VIL’s statement that banks are now moving forward with internal evaluations of the debt proposal indicates the company does not foresee any significant obstacles.

The announcement of these deals comes just ahead of an analyst meeting, amidst concerns in the market regarding the Supreme Court’s ruling on adjusted gross revenue (AGR).