A look at Adani’s entry into the 5G auction race and its implications for the industry.
Analysts and business insiders see Adani’s entry into the nation’s telecom market as a possible upheaval that might have an impact on the industry.
In order to offer private network solutions in a number of its business verticals, including ports and airports, Gautam Adani-led Adani Data Networks has announced that it would take part in the next 5G spectrum auction. It has said explicitly that it has no intention of operating in the “consumer mobility area.”
The entry of Adani into the nation’s telecom market may cause upheaval in the industry, according to analysts and business insiders.
What does the telecom sector stand to gain from Adani’s participation in the 5G auction?
The Adani Group said that the Department of Telecommunications (DoT) had issued a letter of intent to them for the issuance of a unified license for the Gujarat circle in a declaration that was required to be submitted to the DoT prior to the auction.
Technically, according to industry insiders, the license will enable the business to offer long-distance calls and Internet services commercially. They said that the spectrum auction, which is set to begin on July 26, would witness competitive bids for particular frequency bands given the arrival of Adani Data Networks and the efforts of the incumbent firms to solidify their position in the market.
Meanwhile, Adani Group has indicated that it does not intend to enter the consumer mobility sector and is instead taking part in the auction to build its own personal 5G network that it would use to spread across its several business verticals. Despite Adani’s declaration that it would avoid the consumer market, according to a Goldman Sachs report, “Buying spectrum in the upcoming auction could increase competition in enterprise 5G, as well as give the Adani Group the opportunity to expand into mobile consumer services over time.”
According to brokerage firm CLSA, the group’s arrival might lead to uncertainties around spectrum pricing. Why would Adani participate in an auction rather than waiting for a direct spectrum? Is the query.
According to a report, Adani’s participation may raise questions about spectrum price in the 5G auctions, which were supposed to be dominated by the rivalry between Bharti Airtel and RJio (Reliance Jio).
As India prepares to bring out future generation 5G services through this auction, we are one of the numerous applicants engaging in the open bidding process; the Adani Group had stated last week when confirming its participation in the 5G auctions. In order to improve cyber security in the airport, ports & logistics, electricity production, transmission, and distribution, as well as numerous manufacturing processes, we are taking part in the 5G spectrum auction.
We don’t want to compete in the consumer mobility market. Across all of its companies, the conglomerate will need high-quality data streaming capabilities via a high-frequency, low-latency 5G network as it develops its own digital platform with super applications, data centres, and industrial command and control centres.
What are private 5G networks?
The government proposed last month that tech firms and other businesses purchase spectrum directly from it in order to test and develop industry 4.0 applications, such as machine-to-machine communications, the Internet of Things (IoT), artificial intelligence (AI), and other related technologies. This announcement came at the same time as the government announced the spectrum auction for the nationwide rollout of 5G services.
These networks are referred to as private captive networks since they are created to serve a particular organization rather than the broader public. In a set of regulations released last month, the DoT had stated that businesses seeking to establish private 5G networks might receive spectrum from the government directly and would need to secure a 10-year renewable license, for which the government would not impose any license fees.
The DoT has stated that it will conduct demand analyses and seek the recommendations of the Telecom Regulatory Authority of India (Trai) for the direct allotment of spectrum to such businesses.
Alternatively, businesses can lease spectrum from one or more telecom providers. To do so, they must submit to the government information on the spectrum band, the amount of range, the length of the lease, the region, and the geo-coordinates of the designated logical boundary.
What are other people taking part in the auctions?
According to a statement by the DoT, Bharti Airtel, Reliance Jio, and Vodafone Idea (Vi) are the three other telecom firms that have sought to participate in the spectrum auctions in addition to the Adani Group subsidiary.
According to its reports to the DoT, the Adani subsidiary has a net value of Rs 248.35 crore. Reliance Jio’s net value was Rs 1,97,790 crore with a paid-up capital of Rs 1,54,125 crore, whereas Bharti Airtel’s net worth as of March 31 was Rs 75,887 crore with a paid-up capital of Rs 2,795 crore.
edited and proofread by nikita sharma