The fresh equipment contracts are aimed at accelerating the shift of Airtel’s remaining feature phone users to smartphones and boost user revenue, the people said.
This is in addition to talks the billionaire Sunil Mittal-led telco is holding with global vendors to buy more 5G network gear, though the priority currently is to deepen 4G coverage across India, the people said. “Ericsson, Nokia and Samsung will meet around 50%, 45% and 5% of Airtel’s near-300,000 additional 4G base station requirements, respectively, over a three-year span,” one of the persons said.
The Rs 9.46 lakh crore market cap telco would pay the three vendors largely by issuing letters of credit.
The letters of credit would, typically, be given by banks, guaranteeing that the telco’s future payments to the vendors would be disbursed on schedule and for the contracted sum.
Airtel’s stock price has rallied over 80% in the last year against a 23% rise in the benchmark Sensex.Industry executives familiar with Airtel’s talks with the equipment makers said Sweden’s Ericsson may supply 4G base stations in 11 circles–Rajasthan, Haryana, Delhi, UP-West, Himachal Pradesh, J&K, Assam, Northeast, Andhra Pradesh, Tamil Nadu, Karnataka. Finland’s Nokia, in turn, may meet Airtel’s 4G base station needs in 9 circles–Mumbai, Gujarat, Madhya Pradesh, UP-East, Bihar, West Bengal, Odisha, Maharashtra and Kerala-and South Korea’s Samsung in the remaining two markets of Kolkata and Punjab.
Airtel, Ericsson, Nokia and Samsung did not respond to ET’s queries.
Airtel’s decision to go for another round of 4G network expansion is tied to its aim of deepening the mobile broadband coverage in five key circles-Gujarat, Maharashtra, MP, Kerala and West Bengal-where it has a limited 4G presence.
In parallel, the telco also plans to bolster 4G coverage in India’s non-census towns and villages as it looks to rapidly convert its remaining 95 million-odd 2G users to 4G.
