Adani admits involvement in the battle for the telecom spectrum, intending to use it for a private network.
The company owned by the wealthiest Indian, Gautam Adani, said on Tuesday that the millimeter wave spectrum it had purchased for Rs 212 crore will be used to build a private network to service its data centers and enterprises. In the auction that ended on Monday, Adani Data Networks Ltd (ADNL), a division of Adani Enterprises Ltd, won the bid for the 20-year use of 400MHz spectrum in the 26GHz millimeter wave band.
Adani Group intends to use the airwaves for both its data centers and the mega app it is developing to help industries ranging from gas retail to ports and electricity delivery to airports. According to a statement from the Adani group, the recently acquired 5G spectrum is anticipated to contribute to the development of a unified digital platform and speed up the pace and scope of the digitalization of the Adani group’s core infrastructure, industrial, and B2C business portfolio. Adani Group’s purchase price was a small portion of the government’s received bids of Rs 1.5 lakh crore and it represented less than 1% of all the spectrum sold in the auction. The government has so far given enterprises like Adani permission to construct its captive data networks by either leasing telecom operators’ spectrum or awarding them a turnkey contract to do so. While the government has in theory approved the direct allotment of spectrum to businesses, it has stated that it will first evaluate demand before asking the Telecom Regulatory Authority of India to develop regulations in this area. Nothing in the rule, however, prevents any business from purchasing spectrum at auction and using it for a private captive network. The type of license a company obtains to use the spectrum is entirely up to the company in question. Although Adani Group has declared that it will use spectrum for private networks, it’s entirely possible that at a later time it obtains a unified license (UL) and begins offering all types of telecom services to customers, including phone and data services. A UL may also allow it to start creating private networks for other businesses. Companies must spend Rs 15 crore for an India-wide UL. There is precedent for a staged introduction into fully-fledged telecom services, so it wouldn’t be surprising if Adani Group entered the telecom services market in that way. The group’s larger digital integration strategy includes building the largest industrial operations cloud in the world, connecting its data centers through a network of submarine and terrestrial cables, developing the super app to offer a suite of services across its 400 million consumer base, and establishing a world-class AI center of excellence. Data centers, terrestrial fibre and submarine cables, industrial cloud, AI innovation laboratories, cybersecurity, and SuperApps are all included in the group’s digital infrastructure portfolio, which also includes the acquisition of 400MHz of the spectrum, it said. The highest bidder at the spectrum auction was Reliance Jio, owned by rival billionaire Mukesh Ambani, who took home nearly half of the airwaves offered. Other significant bidders included telecom tycoon Bharti Airtel and Vodafone Idea Ltd. The Adani Group Chairman, Adani, claimed that his ports-to-energy conglomerate’s entry into the industrial 5G market will enable portfolio firms to provide a set of new add-on services that make use of all the other digital markets that are being developed.
A business known as Infotel Broadband purchased 2,300 Mhz of broadband spectrum in 2010. Voice telephony was not permitted under the company’s internet service provider license at the time. Later, Reliance Industries bought the business, and after acquiring spectrum in other bands and obtaining a universal license, the company began offering 4G services in September 2016. Last month, the Cabinet authorized reserve prices for 5G auctions that had been suggested by the industry regulator, Telecom Regulatory Authority of India (TRAI). The regulator had suggested a reduction in the floor price of the 5G spectrum for mobile services of around 39%.