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NEW DELHI : Adani Group’s decision to participate in 5G spectrum auctions to launch its captive networks does not derail the plans of other enterprises seeking airwaves through the non-auction route, sector watchers said.

T.V. Ramachandran, president of the Broadband India Forum, that supports tech companies and proponents of private networks for enterprises, argued that even if the group was to pay an auction-determined price for airwaves for captive use, it should not be applicable to other enterprises considering that they cannot generate revenue from their private networks, while consumer networks on 5G technology can expect higher revenues.

“Adani’s move to participate in auctions only strengthens the case for captive networks as it underscores the general interest in, and importance of private 5G networks," Ramachandran said in an interview. On whether buying spectrum by Adani could set the base price for captive networks of other companies, he said the question does not arise. “Not at all. I am sure all are aware that captive networks do not have external connect, and nil revenue, hence, high auction-type pricing is out of the question. It is relevant only for public networks."

The department of telecommunications is yet to issue the guidelines for captive non-public networks or CNPNs. The department has said it will allow companies to get spectrum directly and establish their own isolated networks. However, the government is expected to undertake demand studies and seek recommendations from the sector regulator for direct allotment of spectrum to the enterprises.

On the other hand, the Cellular Operators Association of India (COAI), which has backed the case for private networks to be offered by carriers on lease, said Adani’s foray into private networks levelled the playing field as all companies wanting to deploy 5G should bid for airwaves. “The spectrum should not be provided on administrative basis as it leads to no business case for the rollout of 5G networks in India. If the independent entities set up private captive networks with direct 5G spectrum allotment by DoT, it will diminish the revenue so much that there will be no viable business case left for TSPs (telecom service providers) and there will be no need for 5G network rollout by TSPs," said S.P. Kochhar, director general, COAI.

Carriers seeks to increase enterprise revenues by offering 5G network services to small, medium and large enterprises, but Adani’s entry in captive networks by obtaining a unified licence will adversely impact the potential revenues from this segment, since participation may be limited to 3.5GHz and 26GHz bands for provision of private enterprise 5G network services, analysts said.

“With enterprises likely to be a bigger source of 5G revenue for telcos in the near term, in such a scenario, a new entrant building 5G networks, even if only for enterprises, will result in increased competition for existing operators," said analysts at Goldman Sachs.

“With only 330MHz of spectrum on offer (40MHz is reserved for BSNL), and three strong bidders (Jio, Airtel and Adani) as well as Vodafone Idea, we expect bidding in the 3.5GHz band to witness higher competition," Credit Suisse said in a note.

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