Ericsson, Nokia, and Others Compete for Vodafone Idea Telecom Contracts Amidst Shifting Dynamics

Ericsson and Nokia, two of Europe’s leading telecom equipment vendors, are aggressively pursuing 4G and 5G business opportunities with Vodafone Idea, even in circles where Chinese companies Huawei and ZTE currently provide services. This move comes as Vodafone Idea looks to expand its network infrastructure and implement 5G technology.

The European companies, along with US vendor Mavenir and South Korea’s Samsung, are all vying for contracts with Vodafone Idea, which is seeking to enhance its network capabilities and provide advanced services to its customers.

Currently, Nokia powers Vodafone Idea’s 4G services in nine circles, while Ericsson does so in eight. Meanwhile, Huawei and ZTE’s technologies are present in seven and five circles, respectively. Huawei’s presence is significant in key areas like Delhi and Chennai, whereas Nokia operates in premium circles like Mumbai and Kolkata, sharing the Tamil Nadu circle with Huawei.

The competition among vendors has intensified as Vodafone Idea evaluates its options for upgrading and expanding its network infrastructure. While European vendors like Nokia and Ericsson are leveraging their trusted telecom source status, Mavenir and Samsung are also aggressively pursuing contracts, especially in circles where Chinese vendors have deployed 4G infrastructure.

However, Huawei and ZTE may still have opportunities for maintenance and upgrades, although new contracts for 4G and 5G infrastructure are unlikely due to regulatory constraints.

Despite queries, Vodafone Idea, Nokia, Mavenir, and Samsung declined to comment on the ongoing discussions.

Analysts suggest that while OpenRAN players like Mavenir may have limited opportunities, Nokia, Ericsson, and Samsung are well-positioned to capture a significant market share. OpenRAN, although promising, is still in its early stages and has not seen widespread deployment compared to traditional infrastructure providers.

Vodafone Idea is expected to finalize new purchase orders for 4G expansion and 5G rollout within the next two months. The telco’s focus on deploying the non-standalone architecture (NSA) for 5G, similar to what Bharti Airtel has adopted, is expected to reduce capital expenditure.

CEO Akshay Moondra emphasized the company’s priority to match 4G coverage with competitors to reduce subscriber churn. He aims to cover 40% of the revenue base with 5G services in the next 24-30 months, with initial 5G rollouts planned within 6-9 months.

With the recent conclusion of an Rs 18,000 crore follow-on public offer, Vodafone Idea plans to utilize a significant portion of the funds for network expansion and 5G rollout. However, the company still has substantial dues to Nokia and Ericsson, who may seek changes in payment terms for new contracts.

Moondra clarified that the FPO proceeds are earmarked for growth capital expenditure and not for clearing vendor dues, which will be managed from internal accruals. This indicates that vendor relationships and contract negotiations are critical aspects of Vodafone Idea’s network expansion strategy.