Consulting and research firm, Analysys Mason suggests that Vodafone Idea may rework on the pacts with its network providers to boost services
India’s largest telecom group, Vodafone Idea Ltd (VIL), has planned to rework on its commercial pacts. According to analysts’ reports, it plans to reduce its equipment partners, thereby taking up fewer network gear suppliers.
Rohan Dhamija, partner and head of India & Middle East, Analysys Mason, cited a concept as the reason behind the move. In a post-merge scene, the two telecom entities may turn to fewer network suppliers to gain better services and heavy discounts. Vodafone Idea’s reworking plan, reportedly, is with Nokia, Ericsson, Huawei and ZTE. It wants to reduce to just one network provider per telecom circle. A timeframe of around two months has been projected to bring down the number.
Reports have also hinted that chances are likely for VIL to opt for the European ones than the Chinese vendors, which in turn, will be another setback for Huawei and ZTE. The two have been facing challenges over the past few months. Huawei was earlier blocked by the US and Australia. It was followed by Department of Telecom (DoT) barring the two in developing 5G use cases for India.
Bank of America, Merrill Lynch has pointed out a higher capex outflow towards network equipment if VIL avoids the Chinese vendors. Capex or capital expenditure refers to the amount spent on purchasing, repairing, updating or improving an equipment.
Currently, Nokia is the Vodafone-Idea entity’s networks equipment provider in fifteen circles, followed by Ericsson in 14 circles. Huawei caters to seven while ZTE has three circles. Nokia has been a long-term partner for both Vodafone and Idea networks in supporting technologies.
Vodafone India recently merged with Idea to form the country’s largest telco. The aim was to generate $10 billion in the upcoming years.
