Sweden’s Ericsson bags $300 mn Vodafone 4G contract

Vodafone India has awarded a 4G deployment contract worth $300 million (about Rs2,040 crore) to Swedish gear maker Ericsson for UP West, Rajasthan, Odisha, the North-east and Assam telecom zones, according to an Economic Times report citing sources.

''The deployment of 4G LTE network is expected to be completed by the third quarter of 2017. Ericsson, under this contract, is deploying its full radio system portfolio that offers 50 per cent improved energy efficiency,'' said one of anonymous sources.

Queries emailed by ET to Ericsson and Vodafone India did not elicit any response.

Vodafone India, the domestic arm of the British telecom firm, which is expediting its network expansion and ramping up capacities to counter bigger rival Bharti Airtel and new 4G entrant Reliance Jio Infocomm, is currently in talks with Aditya Birla Group-owned Idea Cellular for a potential equal merger.

Vodafone India and Idea Cellular have common network equipment and managed services vendors. The proposed merger could lead to realignments of existing contracts with their respective partners. Both the telcos may have to renegotiate some vendor contracts to optimise network and bring in operational efficiency on a circle-to-circle basis.

The two companies had bought spectrum in the 2016 auctions. Vodafone India has given network rollout contracts for all its 4G circles, including a 4G LTE deployment and expansion deal worth €450-500 million (about Rs3,650 crore) to Nokia covering 10 circles and a similar contract to Huawei in Karnataka, Kerala and Delhi circles.

Vodafone also awarded a multi-year managed services contract, worth €200 million (about Rs1,420 crore) to Nokia, covering several telecom circles. It had last year awarded a three-year managed services and network operations contract worth $180-220 million to Huawei in some circles.

The telecom carriers will have to choose between vendors running parallel service and supply contracts, so as to keep one network. They may even redistribute areas between suppliers, a senior executive at one of the tower providers recently told ET.

Vodafone India has already launched 4G services across all 17 circles planned and it is now rapidly expanding 4G footprint within these circles. The telco aims to make it available in 2,400 towns across the country by March. These 17 circles cover 91 per cent of Vodafone India's total revenues and 95 per cent of mobile data revenues.

The company, which started its services in 2007 and has operations across the country, serves more than 200 million customers including over 106 million in rural areas. In a recent statement, it said that it had rolled out one 4G site every 10 minutes in the past two months. It is aggressively expanding its 4G footprint by adding new towns daily.