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Adani Group’s acquisition of telecom license not for competing with Jio, Airtel or Vodafone, say experts

Adani Group’s acquisition of telecom license not for competing with Jio, Airtel or Vodafone, say experts

The digitalisation of the group’s core infrastructure, primary industry and B2C businesses through a planned captive network will help provide them with the advantages of secured internal communication as well as substantial cost savings.

Adani Group’s acquisition of telecom license not for competing with Jio, Airtel or Vodafone, say experts (Photo: Reuters) Adani Group’s acquisition of telecom license not for competing with Jio, Airtel or Vodafone, say experts (Photo: Reuters)

Experts have dismissed reports that Adani Group’s acquisition of a unified license for access services may result in the company locking horns with established players like Reliance Jio, Bharti Airtel and Vodafone Idea in the country’s highly competitive mobile telephony space. Instead, the license will help the company fast-track its plans for rolling out a Non-Public Network (NPN) to service its various businesses, they said.

The recent grant of the license to the group subsidiary Adani Data Networks Ltd (ADNL) has once again sparked speculation over the Ahmedabad-based $24 billion food processing-to-infrastructure conglomerate’s telecom plans.

“We must not forget that anyone who had successfully bid in the 5G auction is required to obtain a license to start services. With the government yet to complete the exercise for finalising the norms for captive private networks, there is a lack of clarity in that area,” said the director at telecoms consultancy ComFirst, Mahesh Uppal. “Thus, by obtaining a license promptly, ADNL has been able to reduce any uncertainty arising out of a delay in the allocation of spectrum for captive private networks,” he added.

“We don’t know yet how much time it will take for the government to formulate the guidelines for captive 4G or 5G networks. The unified license for access services will enable them to launch such an industrial network as they will be able to launch NPN services without having to wait for the government policy to be finalised,” observed the president of the not-for-profit body ITU-APT Foundation of India (IAFI), Bharat Bhatia.

Calls and messages to Adani Group headquarters seeking an official comment for the story went unanswered.

Improving internal efficiency, communication

Adani Group has earlier mentioned that its Rs 212 crore spectrum purchase in the 400 MHz band for 20 years was intended for the digitalisation of its core infrastructure, primary industry and B2C businesses. The portfolio comprises data centres, terrestrial fibre, submarine cables, industrial cloud, AI innovation labs, cybersecurity and a super app that is currently under development.

This is motivated by the need to improve internal efficiency and communication rather than the objective of a commercial rollout of telecom services. It will, therefore, not have an impact on the telecom sector as such, say experts.

“Once their data centre stabilises, they might go for a data-intensive license and that could change things a bit,” stated the head of research at Ventura Securities, Vinit Bolinjkar, adding, “They have seven listed entities and probably another seven which are unlisted. Thus, their internal consumption of data and communication is very high.”

For example, the group’s command centre in Ahmedabad regulates all their green energy sites. Those sites generate a copious amount of data like the amount of energy being generated, wind speed, sunlight intensity, etc. Following the rollout of the NPN, this will become a real-time as well as secured communication.

“These are high data transmitting communication patterns. Now, this will become real-time and they will have more secure communication. It’s akin to having a satellite phone. And they will save a lot of cost on communication, which they were earlier paying to a third party,” said Ventura Securities’ Bolinjkar.
 

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Published on: Oct 13, 2022, 5:55 PM IST
Posted by: Tarab Zaidi, Oct 13, 2022, 5:50 PM IST