Cash-strapped Vi holds out hope for struggling 5G gear companies
Vodafone Idea (Vi) is set to gain from a slump in demand for 5G network gear globally, including India, that has dented recent earnings at companies such as Nokia and Ericsson.
Despite the Indian telecom operator's precarious financial condition, global network equipment vendors are likely to prefer working with Vi, which still has more than 200 million users, but needs to urgently expand 4G network capacity and also start 5G rollouts to compete effectively with bigger rivals Reliance Jio and Bharti Airtel.
«Given that Reliance Jio and Bharti Airtel are likely to cut capex spending in FY25, having virtually completed their pan-India 5G rollouts and seen little by way of monetisation, combined with the global slowdown in 5G deployments, network vendors would definitely welcome any fresh 5G contracts from Vi as long as they are on a cash & carry model,» a top executive at a leading global 5G equipment supplier told ET.
Sector analysts agree that Vi's vendors, including tower companies and network equipment suppliers, would be willing to do business with the telco if the latter concludes its targeted ₹45,000 crore fundraise by the June quarter. But they too believe Vi's vendors will push for cash deals instead of credit transactions, given the telco's massive backlog of dues.
«Our checks with tower cos and equipment suppliers indicate that despite the issue of pending dues, the vendors seem keen to work with Vi. This is because markets globally are depressed, and so, any growth from markets like India is good,»
