The Auction –
The Government recently announced the 2022 auctions for rights to use Spectrum in 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz (mid frequency), and 26 GHz (high frequency) Bands. The spectrum auctions will feature the following telecom companies –
Reliance Jio Infocomm Ltd: Net Worth of Rs. 1,97,790 crores
Bharti Airtel Ltd: Net Worth of Rs. 75,887 crores
Adani Data Network: Net Worth of Rs. 248.35 crores
Vodafone Idea Ltd: Negative Net Worth of Rs. 80,918 crores
A total of 72,097.85 MHz of spectrum worth at least Rs 4.3 lakh crore will be put on the block during the auction that will commence on July 26, 2022.
The Private Route –
Alongside the announcement of a spectrum auction for the rollout of 5G services across the country, the government released a proposal for tech companies and other enterprises to acquire spectrum directly through Private captive networks. This enables the companies to acquire the spectrum directly from the government with a 10-year renewable license.
The Entry of Adani Data Network –
In a surprising move, the Adani Group marked its entry into the telecom industry through participation in the upcoming spectrum auctions. While the company has made it clear that they don’t want to venture into the consumer mobility space and aims to just acquire the license to provide private network solutions along with enhanced cyber security in its airports, ports, power generation, distribution, and various other operations, however, does it mean that Adani will not make a move in the upcoming times? Even if the group is claiming its 5G play around private captive networks, they will definitely target 5G airwaves in both 26 GHz and the more expensive C-band (3.3-3.67 GHz) which will strengthen their telecom infrastructure.
The entry of Adani has already made the bidding process very competitive with Reliance Jio & Airtel looking to strengthen their presence in the 5G space which might lead to highly aggressive bids for some frequencies. Therefore, it will be interesting to witness Adani’s next move in the telecom space.
Why did Adani choose the Public Route?
The main question behind the story is why did Adani choose the public route when he had the option to acquire the license privately for its enterprise business. Was it to announce its entry into the telecom space and make people and other companies aware of its presence or Was it to make the spectrum auctions more competitive leading to highly aggressive bids from the already dominant players in the space? Gautam Adani is a smart businessman known for his strategic investments and he will certainly look forward to having a piece in the constantly growing Indian telecom space.
This story sounds similar to that of RIL’s venture into telecom back in 2010. With Vodafone Idea in a vulnerable state and the government looking to sell its 33% stake in Vi, will Adani leverage the opportunity and enter into a potential merger/partnership with the company to mark its entry into consumer mobility space. Their entry into the space certainly guarantees more spectrum sale which is good for the government as the price of the mid-band spectrum may rise by approximately 10% (over RP of Rs. 317 crore/unit)
While Adani looks to build the telecom infrastructure for its enterprise business, would it make a surprise entry into the consumer space and change the landscape of the industry in the time to come?
