Two years after acquiring 5G spectrum, the Adani Group has yet to roll out its captive networks, citing commercial unviability. The Department of Telecommunications (DoT) has now sought an action plan from the group, raising the possibility of spectrum surrender. This isn’t the first time the DoT, under the Ministry of Communications and Information Technology, has questioned Adani Group on its 5G rollout delays. Multiple communications have highlighted the group’s failure to meet the minimum rollout obligations tied to its 5G license.
According to DoT’s rollout mandates, telecom operators must commercially launch 5G services in both metro and non-metro circles. The Adani Group’s inability to comply has led to spectrum dues and penalties for non-compliance. Rules stipulate that spectrum can only be surrendered after 10 years, while trading is permitted after two years. Non-compliance penalties escalate from ₹1 lakh per week (first 13 weeks) to ₹2 lakh per week (next 13 weeks), eventually leading to a show-cause notice.
Adani Group’s 5G Spectrum Acquisition
Adani Data Networks, a subsidiary of Adani Enterprises, acquired 400MHz of 5G spectrum in the 26GHz millimeter-wave band in August 2022 for ₹212 crore. The spectrum included:
- 100MHz each in Gujarat and Mumbai.
- 50MHz each in Andhra Pradesh, Rajasthan, Karnataka, and Tamil Nadu.
These licenses were intended for private captive networks, not consumer mobility services like those offered by Reliance Jio and Airtel. The goal was to use the spectrum for specific connectivity needs, such as within factories, hospitals, or other localized settings. At the time, Adani Group stated that the spectrum would help build a unified digital platform to accelerate digitization across its core infrastructure and business portfolios.
Challenges and Commercial Viability Issues
A report by MoneyControl indicates that the Adani Group is finding it commercially unviable to deploy the spectrum. The conglomerate has reportedly communicated its deployment challenges to the DoT.
Indian firms have struggled with rolling out private captive networks due to limited use cases and high costs. For instance, Simnovus, a US-based 5G software provider, notes that high net worth requirements for spectrum acquisition, expensive spectrum prices, recurring costs, and a complex regulatory framework have posed significant barriers. While firms like Reliance Jio and Airtel have demonstrated use cases, others, including the Adani Group, face difficulties in justifying the investment in private 5G networks.
