Adani Group to bid for 5G spectrum; may be the first step towards private captive network

The Adani Group is understood to have applied for participating in the upcoming 5G spectrum auction, catching industry observers by surprise. Friday was the last day for companies to put in their applications for participating in the auctions which commences from July 26. While the country’s three telecom operators – Reliance Jio, Bharti Airtel and Vodafone Idea – have submitted their applications, government as well as industry sources said that Adani Group is also one of the applicants.

Spectrum can be used for various services based on the licences companies go for. It is quite possible that as a first step Adani Group may use the airwaves to set up a private captive network for its data usage, something which has been allowed by the government. The government has so far allowed enterprises like Adani to build their captive data networks by either taking spectrum on lease from the telecom operators or giving them a turnkey contract to build the same. As far as direct allocation of spectrum to enterprises is concerned, while the government has given an in-principle approval, it has said that it would first assess the demand and then ask the Telecom Regulatory Authority of India (Trai) to frame rules in this regard.

However, sources said that there’s nothing in the regulation so far which prohibits any enterprise from buying spectrum in the auctions and use it for private captive network. It is up to the firm concerned what kind of licence it acquires to use the spectrum. If Adani Group wants it can buy spectrum in auctions and take the licence for private captive networks and build the same. It can even acquire a unified licence (UL) and start providing all forms of telecom services, which includes voice and data services to consumers. Alternately, by taking a UL it can get into the business of making private network for other enterprises.

For a pan-India UL, companies have to pay Rs 15 crore.

There’s a precedent to a stepwise entry into full-fledged telecom services. In 2010, a company called Infotel Broadband acquired data spectrum in 2,300 Mhz.

The company at that time had an internet service provider licence under which voice telephony is not allowed.

The company was later acquired by Reliance Industries which after acquiring spectrum in other bands, took a universal licence, and started providing 4G services from September 2016 onwards.

Telecom analysts said that if Adani Group acquires spectrum through auctions and takes a private network licence, it can build its captive network. If it acquires a UL, even if does not get into providing telecom services, it can get into the business of building private networks for other enterprises. Depending upon the market and the opportunities, it can even at some stage get into all forms of telecom services. Adani Group could not be contacted for its comments.

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