Ericsson looks to increase share in India, aims for orders from Vodafone Idea
- Nitin Bansal, India MD of Ericsson, tells Mint that discussions with Vodafone Idea are ongoing but new purchase orders are yet to be given out. India equipment to be exported.
Telecom equipment provider Ericsson aims to increase its share in the Indian market on the back of new orders that it expects to come from existing customer Vodafone Idea, which will spend the bulk of its fundraise on enhancing 4G services and rolling out 5G services.
Nitin Bansal, India managing director of the Swedish gear maker, said in an interview that discussions with the No. 3 carrier were ongoing but new purchase orders were yet to be given out. “We continue to talk. We have been discussing across all telcos in India. Once they decide, they will tell us what they have in mind,” he said.
“As a technology provider, our ambition is always to get more but I will never say that we want to get less from any customer. But the discussions are ongoing, and we will wait for them to decide what they have in mind,” Bansal said in response to question on getting more business from circles of Vodafone Idea that are currently using gear from Chinese vendors Huawei and ZTE.
Also Read: Vodafone Idea faces tough task to stop user exits, start 5G
The latter could be replaced when the telco upgrades to 5G as the Indian government rules do not permit ‘non-trusted’ sources for telecom equipment. Huawei and ZTE are yet to get this status, while Ericsson and Finnish rival Nokia have got theirs.
The Vodafone opportunity
Vodafone Idea recently raised ₹18,000 crore from India’s largest follow-on public offer till date and another ₹2,075 crore from promoter Aditya Birla Group. The loss-making telecom services provider is also in talks with banks and financial institutions to raise another ₹35,000 crore through debt.
The telco has planned capex of ₹50,000-55,000 crore for the next three years, which will be primarily aimed at improving 4G services across the country, and launching 5G services in its 17 priority circles. It aims to begin 5G rollouts within six to nine months and achieve 40% revenue coverage within 24-30 months.
Also Read: Vodafone Idea to begin 5G services in six months: CEO Akshaya Moondra
Ericsson has telecom gear deployed in eight circles of Vodafone Idea, while Nokia has gear in nine circles, Huawei in seven and ZTE in five circles.
Senior sector executives who did not want to be named said that vendors were now engaging with Vodafone Idea, which is a change from the past couple of years when they refrained from offering equipment on credit to telcos that were unable to pay up past contractual dues.
Shipping from India
Bansal said Ericsson was looking at exports of telecom equipment from India where it currently has surplus equipment.
“Our factory that we run is in over-capacity in the last few months, but going forward, we’re looking at exports and that’s still work in progress,” he said. “We will come back with more details on which countries, but currently we’re expanding to meet the requirements of the India market.”
Ericsson uses facilities of Jabil, an American contract manufacturer that has its India unit in Pune, to make telecom gear in India that are deployed locally. The capacities have been on an increase as telcos rolled out 5G services throughout the country last year.
Slow growth, but growth nonetheless
Carriers Bharti Airtel and Reliance Jio, which aggressively rolled out their 5G networks, will go slow on their capex plans from this year on, which is set to spell a slowdown in revenue for telecom gear makers including Ericsson.
However, Bansal said that the growth was likely to continue albeit the pace may be slower than 2023. “We're seeing more subscribers coming in, more data being consumed, networks not being congested but used even more. So, it will continue to grow, maybe not the same level as we saw last year, but the growth will continue,” he said.
The carriers that have invested heavily into offering 5G services across the country were now looking at monetisation but have noted that opportunities were absent, prominently by Airtel’s top executive Gopal Vittal in the telco’s earnings call last week.
Also Read: Tech-leading India market critical for Ericsson: Borje Ekholm
Ericsson on Wednesday launched its innovative software toolkit and showcased 5G advanced use cases offering Massive Mimo, advanced RAN slicing, time-critical communication and 5G core. Bansal said that telcos were in discussions to take the enterprise use cases to market, but did not put a timeframe for these to become mainstream among enterprises.
“There are multiple levers to having a live (5G enterprise) deployment. It's the need for investment, an interest (from enterprises) and we have to identify what problem are we trying to solve. So those discussions are happening,” he said.
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First Published:23 May 2024, 07:01 AM IST
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