Idea’s big bet on 5G, contract worth Rs 30,000 crore given to Nokia, Ericsson, Samsung, know what will be the impact on the stock
Debt-laden telecom company Vodafone Idea (VIL) has awarded contracts worth Rs 30,000 crore to Nokia, Ericsson and Samsung for the supply of 4G and 5G network equipment. The company gave this information on Sunday. This contract is for three years. This is the biggest deal offered by any Indian telecom operator this year. The company had earlier announced capital expenditure of $6.6 billion or Rs 55,000 crore over three years. This deal is the first step in this direction. The statement said that this capital expenditure program is aimed at increasing the coverage of 4G population from 1.03 billion to 1.2 billion, rolling out 5G service in key markets and expanding capacity in line with data growth.
What will be the impact on the stock?
Stock market experts say that after the Supreme Court rejected the petition of telecom companies against AGR dues, now the stock of Idea will depend on the performance of the company. The company is emphasizing on increasing its market share. This will reduce the company’s losses and increase profits. This is good news for the company’s stock. There may be a rise in the stock on the basis of this news.
Was the largest company in 2018
Vodafone Idea (VIL) was formed in August 2018 by the merger of Vodafone India and Idea Cellular. At that time it had a customer base of 408 million and was the largest telecom operator. According to data from telecom regulator TRAI, VIL now has 21.5 crore mobile service customers. The company had recently raised Rs 24,000 crore through an equity sale. VIL said it has completed a techno-economic assessment of the company’s long-term projections by an independent third party. The report has been submitted to all the banks and financial institutions, based on which the banks will now proceed with their internal assessment and approval processes.
Supply will start in the upcoming quarter
Supplies under these new long-term contracts will commence in the coming quarter. The statement said that expanding 4G service (coverage) to 1.2 billion Indians is the company’s top priority. VIL CEO Akshay Mundra said that the company has started the investment cycle and this is the beginning of a new phase. VIL will henceforth make an efficient transition to effectively participate in the growth opportunities of the industry, he said. Nokia and Ericsson have been our partners since the beginning and this is another milestone in that continued partnership. He said, we are delighted to begin our new partnership with Samsung. We look forward to working closely with all of our partners as we move into the 5G era.
