Samsung Wins ⁢1st Supply Contract with​ Vodafone Idea

Samsung Electronics Co. is expected to ‌supply $720 million worth of mobile network equipment to Vodafone Idea Ltd. in ‍a⁢ contract that marks its first⁤ supply ‌deal with India’s third-largest telco and a move to shore up Samsung’s‌ underperforming ​mobile networks division.

Vodafone Idea said in a ⁣filing to India’s National Stock Exchange on Sunday that it has signed a combined⁢ $3.6 billion in contracts with Samsung Electronics, Ericsson and ⁤Nokia to buy ‌4th ​and 5th ⁣generation network equipment over‍ the next three years.

With the deal, Samsung will become a new vendor‍ for the Indian mobile service⁣ operator, accounting for​ 20% of the supply. Ericsson and​ Nokia each claim 40% of⁤ the contract.

Samsung ‍is expected to begin ⁢shipping to Vodafone as early as the fourth quarter of this year, ⁣according to industry sources.

In the filing, Vodafone Idea said the vendor agreements mark “the first step towards delivering the ⁢company’s transformative three-year capex plan of $6.6 billion.” Its CEO Akshaya Moondra said: “We‍ are proud to start our ​new partnership with Samsung.”

The Indian ‌company aims to take the attention of the 4G population ⁢from‌ 1.03 billion ⁤to 1.2 billion, launch 5G in key markets and ‌expand capacity to meet data ‌growth.

Samsung Network Business in Restructuring

Vodafone Idea is aggressively expanding mobile networks to narrow its gap with first and second largest rivals Jio and Bharti Airtel​ in the country.

The‌ expansion of ⁣its facilities is expected to lead to additional supply ‌agreements with Samsung and maintain the​ South Korean company’s mobile network business, which has been⁤ cutting back ⁢on operations.

In June, the Samsung Networks Business division ‌transferred hundreds of the roughly ‍4,000 employees at its headquarters to other business divisions. Its revenue fell 30% to 3.78 trillion won ($2.8 billion) ⁢on a year ​in 2023.

Samsung is the world’s largest smartphone manufacturer by shipment. But it is the fifth largest player among the world’s ​telecommunications equipment suppliers with a share of only 2% from 2023, according ⁢to Dell’Oro ⁢Group, a‍ telecommunications industry tracker.

In order to renew its business, early this month Samsung Networks appointed‍ Everth Flores,⁣ until recently the CEO⁢ at Ericsson ‌Netherlands, as vice president ​and head of Samsung Networks Europe.

In January last year, Samsung hired two former Ericsson executives, including Henrik Jansson, Ericsson’s former sourcing manager.

Last month, Bloomberg reported that Samsung ⁣had expressed interest in‍ Nokia ​Oyj’s mobile ⁤network business. Nokia denied the report.