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Shares of Vodafone Idea surged by nearly 9% in early trade on Monday, following the telecom operator’s announcement of a significant $3.6 billion (approximately Rs 30,000 crore) deal with network equipment suppliers Nokia, Ericsson, and Samsung.
The partnership, spanning over three years, is a critical part of Vodafone Idea’s ambitious three-year capital expenditure plan worth $6.6 billion.
By 10:00 am, Vodafone Idea’s stock had risen 8.68%, trading at Rs 11.39 on the BSE.
Vodafone Idea’s $6.6 billion capex initiative aims to expand its 4G coverage from the current 1.03 billion to 1.2 billion people, introduce its 5G network in key markets, and significantly increase capacity to meet growing data demands.
The deal marks the beginning of this plan, as the company partners with Nokia and Ericsson, its long-term collaborators, while also bringing Samsung on board as a new partner.
“The deal is the first step towards our transformative three-year capex plan,” Vodafone Idea said in a stock exchange filing. The company said that the equipment from its new partners would not only support network expansion but also improve energy efficiency, reducing operational costs.
Vodafone Idea’s CEO, Akshaya Moondra, expressed optimism about the company’s future, saying, “We are on our journey of VIL 2.0 and expect to stage a smart turnaround to participate in the industry’s growth opportunities.”
He highlighted the importance of maintaining partnerships with Nokia and Ericsson while welcoming Samsung to support the company’s 4G and 5G rollout.
The recent announcement comes amid Vodafone Idea’s ongoing financial struggles, particularly its significant Adjusted Gross Revenue (AGR) dues.
Last week, the Supreme Court rejected the company’s petition to reassess its AGR liabilities, leaving Vodafone Idea with a hefty Rs 70,300 crore due, including interest. The company’s self-assessed liability is half that amount at Rs 35,400 crore.
Vodafone Idea is set to provide more details about its growth strategy in an analyst update call scheduled for later today, with CEO Akshaya Moondra and CFO Murthy GVAS expected to offer insights into the telecom operator’s next steps following the Supreme Court setback.
Vodafone Idea has already implemented some quick-win Capex projects following a Rs 24,000 crore equity raise and the acquisition of Rs 3,500 crore worth of additional spectrum in the June 2024 auction. This has resulted in a 15% capacity boost and an increase in population coverage by 16 million people as of September 2024.
Vodafone Idea is now focusing on expanding its 4G network to 1.2 billion people as its top priority. The company believes that its new equipment will offer enhanced customer experiences and position Vodafone Idea for greater success in the evolving telecom market.