Ericsson and Nokia Will Not Provide 5G Devices to Vodafone Idea for the Time Being

According to media reports, Ericsson and Nokia decided not to provide 5G devices to Vodafone Idea, India’s third largest service provider.
This is mainly because Vodafone Idea has not settled its past expenses, and also because its financial situation is unstable. Although Vodafone Idea has made some payments to suppliers, it is far from completing the total cost of INR 35 billion (US $426.5 million) to INR 40 billion (US $487.45 million). This makes suppliers understandably unwilling to initiate new credit lines.
However, this puts Vodafone Idea in a difficult position, because according to government regulations, Vodafone Idea needs to meet some minimum launch obligations before September 2023 to retain spectrum licenses.

By the end of March 2023, the debt of Vodafone Idea was about 2 trillion rupees (US $24.36 billion). More importantly, its efforts to attract investors have not yielded results in the past three years. Media reports indicate that the company is in deep negotiations with several private equity funds to raise $2.4 billion, but it is currently unclear when it will be achieved.
As there is no capital and Nokia and Ericsson are unwilling to provide credit, Vodafone Idea is unlikely to launch 5G service soon. This will result in its users and market share continuing to be lost to competitors who have already deployed 5G.
It is unclear whether Samsung and other suppliers have also decided not to cooperate with Vodafone Idea on credit.
At the same time, despite the restrictions imposed by India on Chinese suppliers, China’s ZTE has been allowed to provide Vodafone Idea with 2 billion Indian rupee (US $24.36 million) worth of optical transmission equipment. According to media reports, ZTE is acceptable in this incident as it is upgrading its existing network rather than building a new one.
Huawei and ZTE are unable to participate in the 5G market in India because the Indian government refuses to issue them with “trusted source” certification. Currently, Indian telecommunications companies can only collaborate with suppliers with trusted source licenses.
It remains to be seen whether this transaction between ZTE and Vodafone Idea has opened the door for Vodafone India to purchase 5G equipment from this Chinese supplier. If this happens, Vodafone Idea will be able to purchase 5G equipment at a lower price, and possibly with better payment terms – ZTE is expected to make a comeback in India.