Adani Group’s entry into the 5G private network communication space could open up rivalry with Mukesh Ambani-backed Reliance Jio and Sunil Mittal’s Bharti Airtel in the enterprise communication market.
While the incumbent mobile operators have been trying to block the entry of new players into the private network space, the Adani group’s decision to participate in the auction effectively blunts any potential legal action by the telecom operators, experts say.
“The telecom operators’ main argument against allowing new players has been that of the level playing field. They said that if a new player is then assigned to offer private network services that would disturb the playing field the new operator also pays all the regulatory fees and charges applicable to a telecom operator. By applying to bid for spectrum, instead of waiting for it to be assigned, Adani has shut down the incumbent players’ main point of contention,” said an analyst on conditions of anonimity.
Allowing companies and institutions to own spectrum and run private networks will be a gamechanger in enterprise communications. Compared to a public telecom network, a private 5G network will deliver higher efficiencies. This will be critical as enterprises are increasingly digitising their processes. Other developed countries are also allocating spectrum directly to enterprises as they are the best placed to design networks that are suited to run their operations. Enterprises engaged in automotive manufacturing, logistics service providers, ports and airports, healthcare institutions, etc. are adopting non-public networks, and this trend is likely to gain momentum going forward. This puts the Adani group in a sweet spot because they can focus completely on the enterprise communication market which has higher margins compared to the consumer mobility space.
“Although the Adani group has said that they plan to deploy 5G private network solutions for their own businesses, including airport, ports & logistics, power generation, transmission, distribution, and various manufacturing operations, there is no restriction on them to open the solution to other enterprises once they acquire spectrum through the auction, putting them in direct competition to Airtel and Jio,” said an industry watcher
July 10, 2022