Mon Sep 23 13:10:45 UTC 2024: ## Vodafone Idea Shares Surge 8% After $3.6 Billion Network Deal

**Mumbai, India** – Vodafone Idea Limited (Vi) shares soared over 8% in early trade on Monday, following the announcement of a $3.6 billion deal with network equipment providers Nokia, Ericsson, and Samsung. This deal marks the first step in Vi’s ambitious three-year capital expenditure (capex) plan, totaling USD 6.6 billion (Rs. 550 billion), aimed at expanding 4G coverage, launching 5G services in key markets, and boosting network capacity to meet growing data demand.

The company is leveraging its existing partnerships with Nokia and Ericsson while adding Samsung as a new partner. Vi plans to expand its 4G population coverage from 1.03 billion to 1.2 billion, a significant step in its revival strategy.

The capex is being funded through a recent equity raise of ₹240 billion and additional spectrum acquisition of ₹35 billion. Vi has also undertaken quick-win capex initiatives, deploying more spectrum on existing sites and rolling out new sites, resulting in a 15% capacity boost and a 16 million increase in population coverage by the end of September 2024.

Despite the recent surge, Vi shares have experienced significant volatility in recent weeks. The stock plunged nearly 15% last week after the Supreme Court of India rejected a plea by telecom companies seeking a re-computation of adjusted gross revenue (AGR) dues. This verdict was a setback for Vi’s revival hopes, as it would have significantly reduced its liability.

Despite the court’s decision, analysts remain optimistic about Vi’s future. Nuvama Institutional Equities maintained a ‘Hold’ rating and a 12-month price target of ₹11.5 apiece, emphasizing the importance of Vi’s operational progress in terms of subscriber retention, tariff hikes, and capex velocity.

While the AGR verdict presented a challenge, Vi’s strategic capex plan, combined with its recent equity raise and spectrum acquisition, provides a glimmer of hope for the beleaguered telecom operator. The company’s ability to execute its ambitious plan and deliver on its promises will be crucial in determining its long-term success.

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