Vodafone Idea Stock Surges 8% On $3.6 Bn Deal With Nokia, Ericsson, Samsung
The investment will be used to expand Vodafone Idea's 4G population coverage from 1.03 billion to 1.2 billion, and to issue 5G services in key markets
The stocks of Vodafone Idea surged above 8 per cent in the Monday trading session after the telecom firm secured a deal worth USD 3.6 billion with Nokia, Ericsson, and Samsung for the supply of network equipment over the next three years.
This agreement marked the first step in the company's three-year capital expenditure plan of USD 6.6 billion (Rs. 550 billion), according to its official filing.
Vodafone Idea stock traded at Rs 11.12 with 6.3 per cent gain in the morning session on the National Stock Exchange (NSE).
The investment will be used to expand Vodafone Idea's 4G population coverage from 1.03 billion to 1.2 billion, and to issue 5G services in key markets, as well as increase capacity to meet data growth demands, the filing noted.
"The company has retained its long-standing partners, Nokia and Ericsson, and also brought on Samsung as a new partner," the statement read.
Vodafone Idea said that this contract will enable the company to leverage cutting-edge equipment to enhance customer experiences.
"Moreover, the insights and expertise gained by these vendors in the Indian market over the last two years will help the company implement a more flexible and modular rollout plan, customising services for advanced technologies like 4G and 5G. The new equipment will also bring energy efficiency benefits, thereby reducing operational costs," the company added.
Vodafone Idea stated that supplies from these new long-term agreements will begin in the upcoming quarter.
The company's primary focus is to extend 4G coverage to 1.2 billion people across India, it said.
Following the recent equity raise of Rs 240 billion and an additional Rs 35 billion spent on spectrum acquisition during the June 2024 auction, the company has already implemented several ‘quick win’ capital expenditure projects while finalising these long-term contracts.
These quick wins have primarily involved deploying additional spectrum at existing sites and establishing new ones.
"This has led to a 15 percent increase in capacity and expanded population coverage by 16 million, which is expected to be achieved by the end of September 2024," it added.
The company also noted that customer experiences have improved in certain regions where these rollouts have been completed. (ANI)
