In a significant development for Samsung Electronics’ network business unit, Vodafone Idea announced on September 22 at the Indian Stock Exchange that it would receive telecom equipment worth a total of $3.6 billion from Nokia, Ericsson, and Samsung Electronics over the next three years.

This marks the first time Samsung Electronics will supply telecom equipment to Vodafone Idea, India’s third-largest telecom operator. Samsung Electronics will supply 4G and 5G equipment worth approximately 1 trillion won to Vodafone Idea Limited (VIL), with the supply expected to start as early as the next quarter.

The decision to partner with Vodafone Idea comes at a crucial time for Samsung Electronics. The network business unit has been undergoing restructuring due to a 29.7% year-on-year decline in sales to 3.78 trillion won last year, reflecting the deteriorating telecom equipment market. In June, the network business unit decided to reassign hundreds of its approximately 4,000 headquarters staff to other business units. This new order is seen as a turning point for the unit, which has been striving to enhance its competitiveness.

Vodafone Idea, which is currently expanding its 4G service coverage and planning to launch 5G services, aims to increase its 4G service subscribers from the current 103 million to up to 120 million. The company is also planning to install 5G equipment in key areas. Akshaya Moondra, CEO of Vodafone Idea, expressed his enthusiasm for the new partnership, stating, “We are pleased to start a new partnership with Samsung,” and added, “We look forward to closely collaborating with all partners as we enter the 5G era.”

Samsung Electronics’ order value is reported to be around $720 million, securing 20% of the total contract amount, while Ericsson and Nokia will each take 40%. This reflects the fact that Samsung is entering into a partnership with Vodafone Idea for the first time. Industry observers predict that Samsung Electronics’ network business unit will enhance its business competitiveness using this order as a stepping stone.

Bloomberg reported last month that Samsung Electronics showed interest in acquiring some assets of Nokia to bolster its wireless network business. Recently, Samsung also hired Evers Flores, former head of Ericsson’s Netherlands unit, as an executive in charge of its European network business. These moves indicate Samsung’s strategic efforts to strengthen its position in the global telecom equipment market.

Through this investment, Vodafone Idea aims to narrow the gap with local telecom leaders Jio and Bharti Airtel. Expectations are high for additional orders from Samsung Electronics, as Vodafone Idea is considering expanding its investments further.

Source: Business Korea