Vodafone Idea soars 8% on Rs 30k-cr deal with Nokia, Ericsson, Samsung
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Vodafone Idea share price gained 8.3 per cent intraday, registering the day's high of Rs 11.35 per share, on the BSE on Monday. The buying interest in the telecom company stock came after it finalised a deal worth Rs 30,000 crore with Nokia, Ericsson, and Samsung.
At around 9:18 AM, shares of Vodafone Idea were up 6.3 per cent at Rs 11.14 per share on the BSE. By comparison, the BSE Sensex traded 247.37 points higher at 84,791.68 around the same time.
"Vodafone Idea has concluded a mega $3.6 billion (Rs 30,000 crore) deal with Nokia, Ericsson, and Samsung," Vodafone Idea said in a stock exchange filing.
The deal is for the supply of network equipment over a period of three years.
As per the filing, this is the first step towards the rollout of Vodafone Idea's 3-year capex plan of $6.6 billion (Rs 55,000 crore). The capex programme is directed towards expanding the 4G population coverage from 1.03 billion to 1.2 billion, launching 5G in key markets, and capacity expansion in line with data growth.
While Nokia and Ericsson were already long term partners with Vodafone Idea, Samsung has joined as a new partner. These contracts will allow the company to capitalise on the latest equipment, it said.
Further, the insights obtained by the vendors in the Indian market over the last two years will enable the company to embark on a more flexible and modular rollout plan by customising the services for all advanced technologies (4G & 5G).
In addition, the new equipment will also lead to efficiency gains in energy and thus lower operating costs. The supplies against these new long term awards will start in the coming quarter. Vodafone Idea is planning to expand the 4G coverage to 1.2 billion Indians.
Post the recent equity raise of Rs 24,000 crore and additional spectrum acquisition of Rs 35,000 crore in the June 2024 auction, the company has also executed some quick win capex. These quick wins resulted in a 15 per cent boost in capacity and an increase in population coverage by 16 million by the end September, 2024, Vodafone Idea said in its filing.
Moreover, for the long-term capex, Vodafone Idea is in advanced stage of discussions with its existing and new lenders to tie up Rs 25,000 crore of funds and Rs 10,000 crore of non-fund-based facilities.
In the past one year, shares of Vodafone Idea have lost 7.3 per cent as against the BSE Sensex's rise of 28 per cent.
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