Adani Group has announced that it will participate in the upcoming 5G spectrum auction that is slated to happen later this month. What it means is that the Adani Group will become the fourth group after Mukesh Ambani-backed Jio, Sunil Mittal’s Airtel and Kumar Mangalam Birla’s VI to bid for 5G bandwidth in India.
Though the company has confirmed that this is not an aim to set up a telecom company, the conglomerate wants to set up a private network that can help digitise its various businesses ranging from Airports to data centres and the energy sector.
Media Statement on Adani Group's interest in the 5G space. pic.twitter.com/iyAmvJOf2TJuly 9, 2022
While the official announcement from the Adani Group confirms that the company isn’t in a mood to enter into the telecom business, right now.
However, the same cant be said for the future though.
Both Adani and Ambani are among the richest in India and direct competitors in various industries like Energy, Media, Consumer goods and more. Adani has recently ventured into petrochemicals and has invested heavily in new energy business which includes setting up factories for solar panels, batteries, green hydrogen and fuel cells. hence it won't be a surprise if the company decides to venture into the telecom industry in the near future.
Consumer mobility is not a lucrative business - Adani
While Jio, Airtel and VI are looking to add 5G connectivity to their bouquet of services, Adani Group finds the telecom business highly competitive.
According to official sources, the consumer mobility business doesn’t seem to be lucrative to the company and hence it wants to stay away from it. The fact that the consumer mobility business operates on thin margins and has seen various companies quitting the business might sound like a massive challenge for a new entrant.
All the private telecom players have been struggling with the low ARPU and have gradually increased the costs of their offerings. Any addition to the market will not only increase competition but will also force the existing players to cut down the rates to retain their customers.
However, for some odd reason, the Adani Group says that it is counting this investment as a part of the Rs. 60,000 crore charity pledge. In case the group is able to win the bid, it will use the 5G bandwidth to power connectivity to its education, healthcare and rural development initiatives, the same network will also help the for-profit entities of the company.
Probably we will have to wait for the 5G auction to happen and see how the story unfolds.
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