Nokia, Huawei have good news for Airtel and Vodafone

Bharti Airtel and Vodafone Idea have obtained payment terms of up to three years — as against the norm of three-six months — for renewed and fresh equipment contracts, as the telecom operators seek to ease immediate pressure on cash flows as they fight brutal competition.
Equipment vendors Nokia, Ericsson, Huawei and ZTE have agreed to longer payment terms besides lowering margins on deals with the telecom carriers, industry executives said. This way, they will be indirectly funding both operators’ 4G capital expenditure, which could be about $3-4 billion, over the next two to three years.
“Most of the vendors have given long-term credit to the operators in lieu of getting the orders. The payment terms which were earlier three-six months have now become one-and-a-half to two to even three years,” said a senior industry executive, who did not want to be named. “They’re trying to finance the capex for the operators because operators are under financial pressure,” the executive added.