4G/5G: Vi has a ₹13,000 crore shopping plan
4G/5G: Vi has a ₹13,000 crore shopping plan
New Delhi: Vodafone Idea has expedited talks with European vendors Nokia and Ericsson to upgrade its 4G network and purchase orders are likely to be issued in June-July, said executives aware of the details, adding that these may also include initial 5G deals.
The telco, which has just concluded an ₹18,000 crore follow-on public offer (FPO), will utilise nearly ₹13,000 crore for capex, over half of which will be for 4G expansion. “The talks have gained pace lately as funding has been ensured. It is expected that the purchase order will be issued after the spectrum auction and elections conclude in June,” an executive with one of the vendors told ET.
An Ericsson spokesperson said, “We are engaged with all customers in India but do not comment on our business discussions.” Vodafone Idea and Nokia didn’t respond to queries.
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Officials said Vodafone Idea is seeking updates on technology advancements as it looks to deploy the latest equipment. Vendors are likely to be cautious and look to build safety clauses into contracts. Last year, vendors had refused to provide gear on credit to Vodafone Idea, which was struggling to pay for supplies provided under previous contracts.
Plans in Place
Things have changed with funds in place but companies will want safeguards to ensure payments are made in a timely manner. Apart from the ₹18,000 raised through the FPO, the loss-making operator is looking to get another ₹25,000 crore through debt. In addition, the company has already approved raising ₹2,075 crore from a promoter entity through a preferential share issue.
The telco is focussing on expanding its 4G network, which is crucial to its efforts to stem subscriber losses and compete against Reliance Jio and Bharti Airtel. It has lost 19% market share since the 2018 merger that created it due to inadequate network spends, say analysts.
Vodafone Idea has to first upgrade its 4G network if it plans to start the rollout of 5G. “Chinese vendors have a large share in Vodafone Idea’s 4G network. But since Chinese firms are effectively not allowed in 5G, the telco has to first upgrade the 4G network through European vendors and then plan 5G rollout,” said an industry executive. Regarding 5G, the company plans to reach 40% of revenue coverage in 24-30 months, with the rollout likely to commence in the coming six-nine months.
The company is expected to offer 5G in the non-standalone (NSA) mode as investments are lower than in standalone (SA) networks. Airtel has rolled out 5G through the NSA mode while Jio use the SA mode. In NSA, the 4G layer is utilised for 5G services. In the SA mode, a completely new network is established. Apart from the European vendors, Vodafone Idea is also conducting trials with open RAN suppliers such as Mavenir in some circles like Punjab.
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