Vi set to ink ₹16,500-crore network gear deals with Ericsson, Samsung

Vodafone Idea (Vi) is set to close an around Rs 13,200-crore deal with Sweden’s Ericsson and another Rs 3,300-crore deal with South Korea’s Samsung this week to buy equipment for its upcoming 4G network expansion and 5G roll outs.

These will be the second and third major radio network equipment contracts that the telecom JV between UK’s Vodafone and India’s Aditya Birla Group will close on the heels of its around Rs 13,500 crore deal signed last week with Finland’s Nokia.

Multiple people privy to the deal details said Ericsson will supply 4G and 5G network gear to Vi in 10 circles while Samsung will do so in three key markets.


They added that Vi is now close to signing both deals after a fierce tussle over the past few days between Ericsson and Samsung that resulted in the Swedish vendor bagging the plum 4G/5G gear supply contract for Delhi and the Korean vendor grabbing the lucrative Karnataka circle, which Ericsson was also vying for.

Under the new contract, Ericsson will likely supply 4G and 5G base stations to Vi in 10 markets—Delhi, Rajasthan, Himachal Pradesh, J&K, Odisha, Maharashtra, Northeast, Assam, Kerala and Madhya Pradesh. Samsung, in turn, will handle network gear supplies in Karnataka, Punjab and Bihar.

At press time, Vi, Ericsson and Samsung did not respond to ET’s queries.

According to industry insiders, Nokia appears to have gained an edge over its Swedish rival, as almost 53% of Vi’s customers are based in the nine circles where the Finnish gear maker will handle 4G/5G equipment supplies. By contrast, the 10 circles likely won by Ericsson have less than 40% of Vi’s customers.

“This suggests Vi may spend more on network capex in the markets being serviced by the Finnish vendor, potentially garnering more business for Nokia in future,” said a senior industry executive familiar with Vi vendors’ likely circle-wise wins.

ET had reported in its September 29 edition that Nokia will supply 4G/5G base stations to Vi in Mumbai, Gujarat, Andhra Pradesh, Haryana, UP-East, UP-West, West Bengal, Kolkata and Tamil Nadu/Chennai.

The three vendor contracts will be part of Vi’s recently announced plans to buy $3.6 billion (read: Rs 30,000 crore) of 4G and 5G gear from Nokia, Ericsson and Samsung over a three-year span to bolster its 4G operations and roll out 5G networks in the country’s top cities across its 17 priority circles.

Once these deals close, they will mark a significant step in Vi’s efforts to boost its competitiveness in the market against its financially-stronger rivals, Reliance Jio and Bharti Airtel, and rein in customer losses.

People aware of discussions said Vi is close to finalising the contracts as all three vendors have largely agreed on the commercials (read: pricing, payment terms).

This is since the telco is reckoned to have given strong assurances to Ericsson, Nokia and Samsung that the required letters of credit (LCs) would be furnished within a reasonable timeframe to enable the vendors to execute the first round of purchase orders (POs).

The LCs would have to be issued by banks guaranteeing that Vi’s payments to the vendors for its 4G/5G gear buys would be received on time and for the contracted sums.

Vi has been trying to swiftly wrap up all commercial agreements with its global vendors to ensure network gear deliveries from all vendors can start early-November.

Vi’s CEO Akshaya Moondra recently told analysts that the telco expects to conclude its balance Rs 35,000 crore fundraising plans in two months. These would be via Rs 25,000 crore of bank loans and Rs 10,000 crore of revolving LC-facilities.