Mon Sep 23 03:50:48 UTC 2024: ## Vodafone Idea Strikes $3.6 Billion Deal for Network Upgrade Amidst Debt Crisis
**New Delhi:** In a major move aimed at modernizing its network and competing with rivals, debt-ridden telecom operator Vodafone Idea (Vi) has signed a $3.6 billion deal with Nokia, Ericsson, and Samsung for the supply of network equipment over the next three years. This deal marks the first step in Vi’s ambitious $6.6 billion capex plan.
The company aims to expand its 4G coverage to reach 1.2 billion people, launch 5G services in key markets, and enhance capacity to meet growing data demand. This comes at a crucial time for Vi, which is facing a massive debt burden and recently lost a legal battle regarding its AGR dues to the government.
Vi had outstanding dues of over Rs 2 lakh crore as of March 2023, including a deferred spectrum payment obligation of Rs 1,33,110 crore and AGR liability of Rs 70,320 crore. The company had hoped for relief on the AGR liability, but the Supreme Court rejected its appeal.
This new equipment deal will enable Vi to implement a more flexible and modular rollout plan, customizing services for both 4G and 5G technologies. The company also expects energy efficiency gains and reduced operating costs as a result.
The fresh capex deal is being funded by the equity raise Vi secured last year. The company is also in discussions with existing and new lenders to secure Rs 250 billion in funded facilities and Rs 100 billion in non-fund-based facilities for its long-term capex plans.
Despite the debt burden, Vi’s move to invest in network upgrades suggests a determined effort to stay competitive in the Indian telecom market. With its rivals, Reliance Jio and Bharti Airtel, already aggressively rolling out 5G services, Vi is facing significant pressure to catch up.
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