Telecom: Adani’s push has similarities to Jio foray

Adani’s intent to buy spectrum in upcoming auctions only for private use has uncanny similarities to Jio’s purchase of 2300MHz spectrum in 2010 that could not be used for voice services. Spectrum bought through auctions can be used to offer commercial services in the future by taking a universal access licence. Adani Group’s bid for spectrum: The Adani Group has confirmed that it plans to bid for spectrum in the upcoming spectrum auctions. The company has released a statement that it doesn’t intend to launch commercial networks but instead build private 5G networks for its own use across its data centres, ports/airports and manufacturing facilities.

…a backdoor entry? Enterprises can build private networks by applying for a Captive Non-Public Network (CNPN) licence and seek direct spectrum assignment from the government for a period of 10 years. They don’t have to pay entry or licence fees. A CNPN licensee is not allowed to offer commercial services. In contrast, spectrum acquired through auctions is expensive because it is eligible for commercial services. Given that the Adani Group has chosen to buy spectrum through auctions, it may still be able to offer commercial services by applying for a unified access license in the future.

Uncanny similarities to Jio’s telecom foray: RIL’s foray into telecom has uncanny similarities to the current situation. The spectrum held by Reliance was not eligible for voice services when auctioned in 2010. In 2013, the government changed this condition and allowed 2300MHz spectrum to be used for voice services. RIL got its unified access licence soon after that and launched its services three years later. Similarly, while a CNPN license may not allow Adani Group to launch commercial service at present, these conditions could change. Moreover, nothing stops Adani Group from taking a unified access license in the future which would allow a commercial service launch.