Ericsson looks to raise India share on Voda Idea orders
Telecom equipment provider Ericsson aims to increase its share in the Indian market on the back of new orders that it expects to come from existing customer Vodafone Idea, which will spend the bulk of its fundraise on enhancing 4G services and rolling out 5G services.
Nitin Bansal, India managing director of the Swedish gear maker, said in an interview that discussions with the No. 3 carrier were ongoing but new purchase orders were yet to be given out. “We continue to talk. We have been discussing across all telcos in India. Once they decide, they will tell us what they have in mind,” he said.
“As a technology provider, our ambition is always to get more but I will never say we want to get less from any customer. But the discussions are ongoing, and we will wait for them to decide what they have in mind,” Bansal said in response to a question on getting more business from circles of Vodafone Idea that are currently using gear from Chinese vendors Huawei and ZTE.
The latter could be replaced when the telco upgrades to 5G as the Indian government rules do not permit ‘non-trusted’ sources for telecom equipment. Huawei and ZTE are yet to get this status, while Ericsson and Finnish rival Nokia have got theirs.
Vodafone Idea recently raised ₹18,000 crore from India’s largest follow-on public offer till date and another ₹2,075 crore from promoter Aditya Birla Group. The loss-making telecom services provider is also in talks with banks and financial institutions to raise another ₹35,000 crore through debt.
The telco has planned capex of ₹50,000-55,000 crore for the next three years, which will be primarily aimed at improving 4G services across the country, and launching 5G services in its 17 priority circles. It aims to begin 5G roll-outs within six to nine months and achieve 40% revenue coverage within 24-30 months.
Ericsson has telecom gear deployed in eight circles of Vodafone Idea, while Nokia has gear in nine circles, Huawei in seven and ZTE in five circles.
Senior sector executives who did not want to be named said vendors were now engaging with Vodafone Idea, which was a change from the past couple of years when they refrained from offering equipment on credit to telcos that were unable to pay up past contractual dues.
Bansal said Ericsson was looking at exports of telecom equipment from India where it currently has surplus equipment. “Our factory that we run is in overcapacity in the last few months, but going forward, we’re looking at exports and that’s still work in progress,” he said. “We will come back with more details on which countries, but currently we’re expanding to meet the requirements of the India market.”