Airtel shares have risen more than 80 percent in the last year
According to a report by Bharti Airtel, India’s second-largest telecom company, it plans to place orders worth around $1 billion to Ericsson, Nokia and Samsung for 4G network equipment over the next three years. Economic times.
The new contracts are aimed at accelerating the transition of Airtel feature phone users to smartphones and improving revenue per user, the report said.
Additionally, the telecom giant, headed by billionaire Sunil Mittal, is in talks with global vendors to procure more 5G network equipment. However, the immediate focus remains on expanding its 4G network coverage across the country, the report said.
The report quoted a source as saying, “Ericsson, Nokia and Samsung will cover approximately 50 per cent, 45 per cent and 5 per cent of Airtel’s nearly 300,000 additional 4G base station requirements, respectively, over a three-year period.”
Letters of credit
The telecom giant, with a market capitalisation of Rs 9.46 trillion, is expected to pay the three suppliers primarily through letters of credit. These letters of credit, which are typically provided by banks, will serve as a guarantee that Airtel’s future payments to suppliers will be made on time and in the agreed amount.
Airtel shares have risen more than 80 per cent in the past year, compared with a 23 per cent rise in the benchmark Sensex index.
Base stations for 11 circles
According to the report, industry sources say that Sweden’s Ericsson is likely to supply 4G base stations for 11 districts including Rajasthan, Haryana, Delhi, Uttar Pradesh-West, Himachal Pradesh, Jammu and Kashmir, Assam, North East, Andhra Pradesh, Tamil Nadu and Karnataka. Meanwhile, Finland’s Nokia could supply 4G base stations for nine districts (Mumbai, Gujarat, Madhya Pradesh, UP-East, Bihar, West Bengal, Odisha, Maharashtra and Kerala) and South Korea’s Samsung for the remaining two – Kolkata and Punjab.
Driving 4G for a wider reach
Airtel’s decision to embark on another phase of 4G network expansion is in line with its aim to strengthen mobile broadband coverage in five key circles – Gujarat, Maharashtra, Madhya Pradesh, Kerala and West Bengal – where its 4G presence is currently limited.
At the same time, the telco is looking to improve 4G coverage in uncensus-protected cities and towns across India, while working to quickly transition its remaining 95 million users from 2G to 4G, the report said.
First published: September 18, 2024 | 10:12 am IS
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