Gautam Adani’s plan to bid for 5G airwaves is possibly a larger telecommunications play by Asia’s richest person, according to analysts at Jefferies Financial Group Inc., who see “uncanny similarities” with fellow billionaire Mukesh Ambani’s low-key, re-entry into telecom in 2010 that eventually created India’s biggest wireless operator.
While Adanis intend to buy 5g spectrum in auctions only for private use, they can offer commercial services in the future by obtaining a Unified License, as the services an entity can offer depends on the license held, as per Jefferies.
Mukesh Ambani’s Reliance Industries (RIL) also had to obtain a Unified License in 2013 to be able to offer full connectivity services. In the past, telecom stocks have performed until revenue growth is strong but have de-rated closer to new entrants service launch, as per Jefferies.
“RIL’s telecom foray began in 2010 after the takeover of Infotel Broadband which held an ISP license and had acquired 2300MHz spectrum in 2010 auctions. In 2013, the Govt. opened fresh applications for new Unified licenses. RIL applied for this by paying a Rs17bn fee and was granted this license in late 2013. This enabled Reliance Jio to offer interconnected voice services on any spectrum including the 2300MHz band. RIL launched its network three years later in 2016. Hence, if Adani Group applies for a Unified License, they can also offer commercial services in the future,” the note stated.
The Gautam Adani-led Adani Group, which is seeking to build its own digital platform, superapp and data centers, said in a statement Saturday that it’s participating in India’s 5G spectrum auction to provide private network solutions for its various business and will not be entering the consumer mobility space.
The Department of Telecom has said that applications have been received Adani Data Networks Ltd, Reliance Jio Infocomm, Vodafone Idea Ltd and Bharti Airtel Ltd for participation in upcoming 5G auction for rights to use spectrum in 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz and 26 GHz bands.
However, to achieve that, Adani could have chosen to buy a Captive Non-Public Network permit, which doesn’t allow commercial services and has no entry or license fees. But it chose the more expensive auction route instead, signaling its future ambitions to Jefferies analysts Akshat Agarwal and Ankur Pant.
“Given that the Adani Group has chosen to buy spectrum through auctions, it may still be able to offer commercial services by applying for a unified access license in the future,” analysts at Jefferies said.
Reliance Industries Ltd. spooked India’s telecom market in 2010 by acquiring spectrum that wasn’t permitted to be used for voice services initially but a spate of policy changes in the ensuing years, allowed usage and paved the way for the company to eventually topple the incumbents, including Bharti Airtel Ltd.
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