Companies
Adani mulls surrender of 5G spectrum after more than 2 years of purchase
Summary
- Adani Data Networks, a subsidiary of Adani Enterprises, which bought 5G spectrum in the 26 GHz band in the 2022 auctions is mulling surrendering the airwaves after more than two years of not putting them to use.
Adani Data Networks, a subsidiary of Adani Enterprises, which bought 5G spectrum in the 26 GHz band in the 2022 auctions, is mulling surrendering the airwaves after more than two years of not putting them to use, said four people aware of the development.
The company has not formally communicated its intent to surrender the airwaves but neither has it shared details of whether or how it intends to use the airwaves, according to two senior government officials.
“We’re yet to get any details from them on what they plan to do with the spectrum. There have been some mentions of returning the airwaves but nothing has been communicated formally," one of the officials said, asking not to be named as the discussions were not in public domain.
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Adani Data Networks had said the spectrum would be used for its own private network. One of the officials said that it was continuing to pay penalties for not meeting minimum rollout obligations.
“The penalties involved are only performance-based hence they’re not heavy," another official said on condition of anonymity.
Queries to Adani Enterprises did not elicit a response as of Wednesday evening.
Telcos have to launch 5G services anywhere in the licensed service area in metro areas and at least one city or town in a non-metro area, in the first year of spectrum acquisition for airwaves in the 3.3-3.5GHz band, according to the conditions specified in the Notice Inviting Applications (NIA), the legal document that lays down the terms and conditions of the auctions. For the spectrum in 26GHz band, the telco can launch commercial services anywhere in the service area within a year, as per the minimum rollout obligation.
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Penalties on telcos
Penalties of ₹1 lakh per week for the first 13 weeks, followed by ₹2 lakh per week for the next 13 weeks, will be levied on the telcos that do not meet the obligation. A show cause notice will be issued to the telcos concerned before penalties are levied, the conditions state.
A senior industry executive, however, said that the company need not give up spectrum as it was not paying up any financial penalties and could trade the airwaves or even keep them. “Spectrum can be surrendered any time but after 10 years a company can get back the amount it paid for buying the airwaves and waive the rights for the next 10 years. In Adani’s case that’s a very small amount, so there doesn't seem to be a very strong reason for returning or surrendering the spectrum," he said, asking not to be named.
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Adani Data Networks bought 400 Mhz in the 26 Ghz band for ₹212 crore in the auctions held in July 2022 which was the first time 5G spectrum was auctioned. It currently holds 100 Mhz each in Gujarat and Mumbai and 50 Mhz each in Tamil Nadu, Karnataka, Andhra Pradesh and Rajasthan. While it purchased a unified license which allows it to offer any kind of telecom or internet services, Adani group had clarified that the airwaves were for it to develop captive private 5G networks at its ports, airports and other businesses including power generation and logistics.
“The use case for private 5G networks has not developed so far, not only in India, it is the case globally. Telcos are using the 26 GHz band for fixed wireless access (FWA) and the amount of airwaves Adani has it cannot be used for FWA," said a telecom sector expert with a global consultancy firm, who did not want to be named.
