Join Telegram Channel

Adani Group said to enter telecom spectrum race, to face Jio, Airtel, Vodafone Idea



Adani Group said to enter telecom spectrum race, to face Jio, Airtel, Vodafone Idea



Admin | Post Tuesday, 12 July 2022 - 11:18 AM | 35

Billionaire Gautam Adani?s group is planning a surprise entry into the race to acquire telecoms spectrum, which will pit it directly against Mukesh Ambani?s Reliance Jio and telecoms czar Sunil Bharti Mittal?s Airtel, sources said.

Applications to participate in the July 26 auction of airwaves, including those capable of providing fifth-generation or 5G telecommunications services such as super-high-speed internet connectivity, closed on Friday with at least four applications.

Jio, Airtel and Vodafone Idea ? the three private players in the telecommunications sector ? have applied, three sources familiar with the matter said.

The fourth candidate is Adani Group, one of the sources said, adding that the group had recently obtained national long-distance (NLD) and international long-distance (ILD) licenses.

But this could not be independently confirmed. Emails and phone calls to the Adani Group have elicited no response.

In accordance with the auction calendar, the ownership details of the candidates must be published on July 12 and the bidders must be known at that time.

A total of 72,097.85 MHz of spectrum worth at least Rs. 4.3 lakh crore will be put on the block in the auction, which is expected to start on July 26, 2022.

The auction will cover spectrum in various low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz) and high (26 GHz) frequency bands.

Ambani and Adani, who hail from Gujarat and later set up mega business groups, had until recently not had a direct confrontation. While the former has expanded from oil and petrochemical activities to telecommunications and retail, the latter has diversified from the port segment to coal, energy distribution and aviation.

But increasingly, their interests are overlapping, setting what some say is the ground for a clash.

Adani has in recent months set up a subsidiary for a foray into petrochemicals ? a business that Ambani?s father, Dhirubhai, started before his downstream and upstream operations.

Ambani also announced multi-billion dollar plans for new energy activities, including Giga factories for solar panels, batteries, green hydrogen and fuel cells. Adani, which previously announced plans to become the world?s largest renewable energy producer by 2030, also unveiled its hydrogen ambitions.

And now, if Adani Group participates in the 5G auction on July 26, it will be the first direct competition with Ambani.

Last month, Cabinet approved 5G auctions at the reserve prices recommended by the industry regulator Telecom Regulatory Authority of India (TRAI). The regulator had recommended a reduction of around 39% in the floor price for the sale of 5G spectrum for mobile services.

The validity of the right to use the spectrum will be 20 years.

Overall, payment terms have been eased for bidders in the upcoming auction.

For the first time ever, there is no mandatory upfront payment requirement by successful bidders.

Spectrum payments can be made in 20 equal annual installments to be paid in advance at the start of each year, a relaxation that should significantly ease cash flow requirements and reduce the cost of doing business in this sector.

Bidders would have the option to return the spectrum after 10 years without any future obligation with respect to balance payments. No SUC (Spectrum Utilization Fee) will be levied for spectrum acquired in this auction.

While 5G spectrum in nine frequency bands will be auctioned off to telecom operators, the Notice of Invitation to Bid ? the bid-related document issued by the Department of Telecommunications ? said tech companies will be allowed to take 5G spectrum for their non-public captive network on lease from telecommunications companies.

The tender document indicates that the direct allocation of spectrum to technology companies will follow a study of demand and the recommendation of the sector regulator TRAI on aspects such as pricing and the modalities of such an allocation.

The private networks ruling is seen as a drag on telecom operators, who had argued that if independent entities were allowed to set up private captive networks with direct allocation of 5G spectrum by the telecom department, the business case for TSPs (telecommunications service providers) deteriorate sharply.








Related:

Advertisement