It has been two years since the Adani Group bought 5G spectrum. However, the group has yet to roll out its captive networks due to being commercially unviable. Now, the Department of Telecommunication (DoT) has asked about action plan, reported Moneycontrol. However, the report claims that Adani Group plans to surrender its spectrum.
It's not the first time the DoT, under the Ministry of Communications and Information Technology, has questioned the Adani group regarding its 5G rollout plan. There have been multiple communications asking the group why it has not met the minimum rollout obligation of the 5G license.
Under DoT's 5G rollout obligations, telecom operators must launch services commercially in metro and non-metro circles. Since the Adani Group hasn't been able to do so, reports say it has been paying spectrum dues and penalties for non-compliance.
According to the rules, the spectrum can only be surrendered after 10 years, while spectrum trading is permitted after two years. The non-compliance penalties start at Rs 1 lakh per week (first 13 weeks) and rise to Rs 2 lakh per week (next 13 weeks), followed by a show-cause notice.
What Was Adani Group's 5G Plan?
Adani Data Networks, a subsidiary of Adani Enterprises, acquired the right to use 400MHz of 5G spectrum in the 26GHz millimeter wave band in August 2022 for Rs 212 crore. This included 100MHz of 5G spectrum each in Gujarat and Mumbai, and 50 MHz spectrum each for Andhra Pradesh, Rajasthan, Karnataka, and Tamil Nadu.
These spectrum licenses were for the deployment of private captive networks, meaning they cannot be used for consumer mobility like Reliance Jio or Airtel. Instead, they would be used for connectivity purposes of a single entity in a limited area, such as a factory, hospital, or elsewhere.
At the time of purchase, Adani Group said, "The newly acquired 5G spectrum is expected to help create a unified digital platform that will accelerate the pace and scale of the Adani Group's digitization of its core infrastructure, primary industry, and B2C business portfolio."
However, the MoneyControl report notes that the Adani group is not finding it commercially viable to deploy the spectrum at the moment. It further notes that the port-to-power conglomerate has informed DoT officials regarding the issues with deployment.
Reports say Indian firms have been facing several challenges in rolling out private captive networks, with only a few use cases, such as those of Reliance Jio and Airtel. Simnovus, a US-based 5G software provider, says that the requirement of high net worth for spectrum acquisition, the high price of spectrum, recurring costs, and complex regulatory framework have made it difficult for firms.
