The Adani Group, which has failed to roll out 5G telecom services more than two years after receiving a unified telecom licence, has received queries from the telecom department (DoT) regarding its plan of action, sources aware of the development told Moneycontrol on the condition of anonymity.
According to them, the government has sent multiple notices to Adani Data Networks, a subsidiary of Adani Enterprises, for failing to meet the minimum rollout obligations (MRO) for launching 5G services. The group has, however, not provided clarity on the likely launch date for 5G services.
A person close to the Adani Group told Moneycontrol that the group is planning to surrender the 5G spectrum in the 26 GHz band, acquired during the 2022 auctions. “The company has not formally communicated its decision to return the spectrum but has informed DoT officials that deploying captive private networks for its businesses across ports, airports, power generation, and logistics has not been deemed commercially viable.”
Queries sent to Adani Data Networks did not elicit a response.
Sources said Adani has paid its spectrum dues and penalties for non-compliance with rollout requirements. As per auction rules, operators using the 26 GHz band must launch commercial services in the licensed service area within a year. Non-compliance with rollout obligations results in penalties starting at Rs 1 lakh per week for the first 13 weeks, increasing to Rs 2 lakh per week for the next 13 weeks, along with a show-cause notice before penalties are imposed. According to regulations, spectrum can only be surrendered after 10 years, while spectrum trading is permitted after two years. “The government, however, has no immediate plans to cancel Adani Group’s licence,” one of the persons cited above said.
Under 5G rollout obligations, telecom operators must launch services commercially in metro and non-metro circles. This could involve providing services in just one metro area or at least one city within a non-metro circle. Adani Data Networks could fulfill these obligations by launching broadband services in a single location or connecting one of its ports via a data network.
During the July 2022 5G spectrum auctions, Adani Data Networks acquired 400 MHz in the 26 GHz band for Rs 212 crore. This includes 100 MHz each in Gujarat and Mumbai and 50 MHz each in Andhra Pradesh, Rajasthan, Karnataka, and Tamil Nadu.
Although the company obtained a unified licence allowing it to offer telecom and internet services, it clarified that the spectrum was intended for developing captive private 5G networks.
Adani Data Networks’ spectrum purchase was part of a strategy to enhance its business operations with advanced connectivity. Sources suggest that challenges related to return on investment have rendered the deployment of the spectrum commercially unviable for Adani at this time.
“However, the absence of immediate use cases, minimal penalties for non-compliance, and the slow-evolving ecosystem for private 5G have left the company with options to either trade or surrender the spectrum,” an industry source told Moneycontrol on the condition of anonymity.
The promise of private 5G networks as a key use case of 5G before the 2022 auctions has faced challenges. High initial costs, vague use cases, a nascent ecosystem, and a lack of skilled workforce have hampered adoption in India. Limited awareness among businesses has further exacerbated the issue.
In India, telcos have been leveraging the 26 GHz band for fixed wireless access (FWA), but the spectrum held by Adani is insufficient for large-scale FWA deployment.
Telecom spectrum is regarded as a national asset, and 5G represents a significant advancement in mobile technology, offering faster broadband speeds and lower latency compared to previous generations. It enhances consumer mobile connectivity and ushers in a new era of business and enterprise applications. 5G plays a key role in realising smart cities, enabling high-capacity enhanced mobile broadband, and unlocking the full potential of industrial digitisation.
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