India’s telecom department has penalized Adani Data Networks, a part of the Adani Group, twice in the past year for not using its 5G spectrum and failing to meet rollout requirements. The company has received multiple notices for delaying the launch of connectivity services.
Adani Data Networks is considering surrendering the spectrum it purchased in 2022 auctions as it has not found a clear use for it. Adani Data Networks bought 400 Mhz spectrum in the 26 Ghz band for INR 212 crore in the July, 2022, auctions, marking the first time 5G spectrum was auctioned. The company holds varying amounts of spectrum in different regions.
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Initially, Adani Data Networks planned to use the airwaves for private network solutions in areas such as airports and ports, not for consumer mobility. Sources suggest that Adani Data Networks will not participate in future spectrum auctions, indicating a potential exit from the telecom sector. It is uncertain whether the Department of Telecommunications (DoT) will revoke the company’s license.
During the 2022 spectrum auctions, the government allowed tech companies to acquire spectrum for Industry 4.0 applications such as Internet of Things (IoT) and artificial intelligence (AI). Private captive networks were encouraged, however, companies were required to launch commercial services within a year of acquiring spectrum in the 26 GHz band. Failure to do so would result in penalties.
Industry experts note that private 5G networks face operational challenges and lack economic use cases, making them unattractive to potential buyers. The high cost of spectrum acquisition limits smaller firms from offering private 5G services, leading to a lack of viable use cases.
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