Adani Enterprises jumps on 5G spectrum bid for private network; Airtel slips 5%

Shares of Adani Enterprises jumped 2% to ₹2,338 in the intraday trade on the National Stock Exchange (NSE) on Monday after Adani Group said it is participating in the 5G spectrum auction to provide private network solutions. Reacting to the news, telecom operator Bharti Airtel's stock tanked as much as 5% to ₹661.55 on the BSE.

"We are participating in the 5G spectrum auction to provide private network solutions along with enhanced cyber security in the airport, ports & logistics, power generation, transmission, distribution, and various manufacturing operations," the Gautam Adani-led conglomerate said in a statement on Saturday.

The company, however, clarified that its intention is not to be in the consumer mobility space. "As India prepares to roll out next generation 5G services through this auction, we are one of the many applicants participating in the open bidding process," it added.

"If we are awarded 5G spectrum in the open bidding, it will also align with our recent announcement of significantly increasing the Adani Foundation's investments in education, healthcare and skill development in rural areas, each of which stands to benefit from 5G technology," the ports-to-power giant said.

"As we build our own digital platform encompassing super apps, edge data centres, and industry command and control centres, we will need ultra high quality data streaming capabilities through a high frequency and low latency 5G network across all our businesses," it added.

This comes a month after the Cellular Operators Association of India (COAI) urged the government to not reserve any spectrum that has been identified for use of commercial services for private or captive networks.

The industry lobby, which represents telecom operators like Bharti Airtel, Reliance Jio and Vodafone Idea, said this would not only result in a significant loss to the exchequer but also lead to inefficient use of this "scarce resource".

As per TRAI recommendations, non-telecom enterprises would be allocated 5G spectrum for building their private networks for data needs. However, TRAI has added that such enterprises can take spectrum on lease from telecom operators also.

India's largest IT services provider, Tata Consultancy Services too has sought direct allocation of 5G spectrum, following suggestions by the Telecom Regulatory Authority of India (TRAI) that recommended a certain amount of exclusive spectrum to be earmarked for private 5G networks.

Telecom operators have opposed the concept of private networks, since enterprise data revenue is expected to be the biggest chunk of operator revenues under 5G. That will take a hit if large enterprises set up private networks. Private networks could also open up a new can of worms over what all can be considered to be included under adjusted gross revenues (AGR) in the future.

While addressing the concerns regarding 5G private captive networks, COAI had said that allocating spectrum to industry verticals for operating private captive networks isn't justified as licensed access service providers are fully capable of providing all customised solutions.

Broadband India Forum (BIF), which counts TCS, Cisco, Google, Ericsson and Amazon among its members, had last month said that allocating 5G spectrum to enterprises for private 5G networks does not pose any security threat and will generate extra revenue for the government.