The Adani Group may be facing scrutiny from the Department of Telecommunications (DoT) for its delay in rolling out 5G telecom services more than two years after acquiring a unified telecom licence. According to a report by Moneycontrol, the government has issued multiple notices to Adani Data Networks, a subsidiary of Adani Enterprises, regarding its non-compliance with minimum rollout obligations (MRO) for 5G services.
Adani Data Networks acquired 400 MHz in the 26 GHz band for Rs 212 crore during the July 2022 spectrum auctions, with allocations including 100 MHz each in Gujarat and Mumbai, and 50 MHz each in Andhra Pradesh, Rajasthan, Karnataka, and Tamil Nadu. Although the company holds a unified licence for telecom and internet services, it initially intended the spectrum for building captive private 5G networks to enhance its business operations.
In India, telecom operators have been utilising the 26 GHz band for fixed wireless access (FWA). However, the spectrum held by Adani is considered insufficient for extensive FWA deployment.
Adani Group’s 5G delays
The Adani Group has yet to provide a timeline for launching its 5G services. Quoting insider sources, the Moneycontrol report suggests that the group is contemplating surrendering the 5G spectrum in the 26 GHz band, acquired during the 2022 auctions. While the company has yet to formally communicate this decision, it has reportedly informed DoT officials that deploying captive private networks across its business operations – spanning ports, airports, power generation, and logistics – has proven commercially unviable.
Adani’s spectrum struggles
Adani has also reportedly paid the required spectrum dues and penalties for failing to meet rollout requirements. Despite the delays, the government reportedly has no immediate plans to revoke Adani Group’s licence.
The group’s strategy faced challenges, with reports stating that there were potential concerns over the return on investment, making the deployment of the spectrum commercially impractical at this stage.
Rules on telecom ops
Under auction rules, telecom operators must commence commercial services in their licensed areas within a year. Non-compliance leads to escalating penalties, starting at Rs 1 lakh per week for the first 13 weeks, rising to Rs 2 lakh per week for the subsequent 13 weeks, followed by a show-cause notice before further penalties are applied. Current regulations stipulate that spectrum can only be surrendered after 10 years, though trading is allowed after two years.