Vodafone Idea, Bharti Airtel get longer payment terms from vendors

New Delhi | Mumbai: 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.