What Vi's $3.6B network deal means for investors and customers
Vodafone Idea (Vi) has secured a significant $3.6 billion funding deal, set to revitalize the telecom company and enhance its network infrastructure. This development is anticipated to have substantial implications for various stakeholders, including equipment vendors, investors, and over 200 million subscribers across India. The supplies against these new long-term awards will commence in the upcoming quarter, promising improved network quality and services for users.
Network enhancement to boost user experience
The funding deal is expected to significantly improve the user experience for Vi's subscribers. With advanced equipment deployment, users can anticipate better network quality, fewer call drops, and faster data speeds. The improved infrastructure will also enhance overall connectivity. Additionally, Vi plans to expand its 4G coverage from 1.03 billion to 1.2 billion people, providing more subscribers with access to high-speed internet services and improving coverage in rural areas.
Funding deal paves way for 5G services
The funding deal also lays the foundation for the rollout of Vi's 5G services. Once these services become available, users can expect faster speeds, lower latency, and access to new applications. The adoption of modern equipment could also lead to energy savings, indirectly benefiting subscribers by ensuring a more sustainable network. This development comes as a relief for Vi which has been grappling with a subscriber exodus due in part to its network quality issues.
Equipment vendors to benefit from Vi's funding deal
The funding deal is also expected to benefit equipment vendors like Nokia, Ericsson, and Samsung. These companies have been working with major telcos for their 4G and 5G networks but experienced a decline in sales since Q4 2023 as service providers reduced spending on 5G. The Vi funding deal could help these companies increase their revenues. The network equipment deal includes radios for 5G rollout and 4G swap in circles currently serviced by Chinese vendors.
Vi shares surge following network deal
The deal is viewed positively by investors as it signifies VIL's commitment to network expansion and modernization. This is crucial for the company to compete effectively in the Indian telecom market, dominated by players like Reliance Jio and Bharti Airtel. Today, the telco's shares surged 12% to ₹11.71 on BSE. This comes after Vi's stock prices crashed after the Supreme Court of India rejected AGR review plea and Goldman Sachs downgraded the stock price by 83% earlier this month.
