The Adani group has obtained a letter of intent (LoI) from the department of communications (DoT).
This will allow them to provide telecom services in the Gujarat circle.
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First step towards commercial business
Now, aside from wireline broadband, Adani Data Networks — a 100% subsidiary of Adani Enterprises the group can also provide wireless internet services.
Analysts deduce that this is the first step for the company towards a full-fledged entry into the telecom sector in future.
It has already confirmed its participation in the 5G spectrum auctions on July 26 to build a private network for its data usage.
Initial operations
It will provide private network solutions along with cyber security in the airport, ports & logistics, power generation, transmission, distribution and various manufacturing operations.
Foreign brokerage Jefferies noted that Adani’s plan to buy spectrum in the upcoming auctions just for private use bears similarity to Jio’s purchase of 2300 MHz spectrum in 2010.
However this was not eligible for voice services when auctioned in 2010.
In 2013, the government changed this condition and allowed 2300 MHz spectrum to be used for voice services.
Following RIL’s example
RIL got its unified access licence soon after and launched its services three years later.
While a CNPN (captive network) licence may not allow Adani group to launch commercial services today, these conditions could change.
There’s also nothing to stop the group from taking a UAL in the future, allowing a commercial service launch.
ISP licences
There are three kinds of Internet service provider (ISP) licence — ISP (A), ISP (B), and ISP (C)
The first is for all the 22 circles in the country.
The second, which Adani has applied for, is where a company can initially opt for one circle and can later apply for other circles.
The entry fee for ISP (B) licence for a single circle is Rs 2 lakh.
If the group wants a pan-India licence, it will need to pay an entry fee of Rs 30 lakh.
Under the third category, the licence is for specific areas within a circle.
Adani’s plans
Adani Data Networks is the entity through which Adani Group will bid for 5G spectrum auctions.
It has been given LoIs for national long distance (NLD) and international long distance (ILD) services,
These licences would be for the group’s data centre business, where data needs to be transferred within the country as well as outside.
The licence fee for NLD and ILD licences is Rs 2.5 crore each.
In the absence of NLD/ILD licences, Adani group uses the services of telecom operators to transfer data for which it has to pay carriage charges.
These services will be in addition to private network solutions.
Once it acquires spectrum through auctions, it will have to apply for a captive network licence.
The long distance licence would open a revenue stream for Adani group since it can carry data as well as voice traffic for telcos and other enterprises.