Adani’s telecom plans aimed at offering 5G private networks

After the recent acquisition spree in the media and cement industry, multibillion-dollar conglomerate, Adani Group is eyeing the telecom industry. Adani submitted the application for acquiring the 5G spectrum on Friday, which was the last day of placing the applications.

But the company has no plans to enter the consumer mobility space. Instead Adani plans to buy spectrum for offering private network solutions. “Our intention is not to be in the consumer mobility space. As India prepares to roll out next-generation 5G services through this auction, we are one of the many applicants participating in the open bidding process. We are participating in the 5G spectrum auction to provide private network solutions along with enhanced cyber security in the airport, ports & logistics, power generation, transmission, distribution, and various manufacturing operations., Adani said in a statement on Saturday.

The company said that the strategy will also align with its recent announcement of significantly increasing the Adani Foundation's investments in education, healthcare and skill development in rural areas, each of which stands to benefit from 5G technology. “In addition, as we build our own digital platform encompassing super apps, edge data centres, and industry command and control centres, we will need ultra high-quality data streaming capabilities through a high frequency and low latency 5G network across all our businesses.,” Adani said.

This means that Reliance, Bharti Airtel, Vodafone Idea will continue to be the three private operators providing consumer mobile services and the Adani Group will focus on private networks which is fast emerging as the next big opportunity in the communications space. The auction for 5G spectrum will be held on July 26.

A top industry expert told BusinessLine on conditions of anonymity that it would have been difficult for Adani to enter the consumer mobility space. “In case Adani planned on buying 5G spectrum with a clear intent of providing both voice and data services, it clearly will have to conduct a transaction with one of the operators. Either through a potential merger between the Adani telecom entity and the operator (most likely to be Vodafone Idea) or be a Virtual Network Operator and enter into a network sharing agreement with Vodafone Idea for 4G services. These options are not easy to execute”

While there have been instances of completely new players entering the industry to create standalone 5G networks without entering into agreements with incumbents in global markets such as Philippines and Indonesia, most experts agree that India is too big a market for Adani to build a telecommunications infrastructure from scratch.

Good for consumers

As per experts, Adani’s intent of setting up captive private networks is realistic. “All they would need to do is buy the cheap mm-wave (26GHz) spectrum to set up broadband and private networks. These are in any case the prime new use cases that 5G technology brings onto the table. There is nothing in the regulations that prevent them from setting up private network services using this spectrum,” said an analyst.

Analysts agree however that Adani’s entry into the telecom market could be good for enterprise consumers as it will add much-needed competitive vigour to the market. “This will motivate incumbents to innovate, and rollout of private networks will be much faster,” said another expert.

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