Mukesh Ambani’s Reliance, Bharti Airtel and Vodafone Idea have also submitted applications to participate in the spectrum auction, according to the Ministry of Telecom. These companies are currently in the telecom business in the country. But fourthly one more person has applied in the auction. Gautam Adani is the powerhouse in the country’s energy and port sectors. The application is in the name of Adani Data Network Limited. While the list of applicants has been released, the Telecom Ministry has not clarified whether anyone has been prequalified.
5G auction will start from July 26. Those who win the auction will get the license right to use the spectrum for a period of 20 years. At least 72,097.85 megahertz of spectrum worth Rs 4.3 lakh crore will be up for auction. Last month, the cabinet had approved the 5G auction at the reserve price recommended by the sector regulator Telecom Regulatory Authority of India (TRAI).
Payment terms are relaxed to attract bidders. First successful bidders will not have to pay upfront. The successful bidder shall make payments in 20 equal annual installments payable in advance at the beginning of each year.
Adani’s entry into this sector is eagerly awaited by the business world. Participating in the auction signals the group’s entry into the telecom sector. Adani is also rumored to be entering this sector as a big challenge to Mukesh Ambani. “We are participating in the 5G spectrum auction to provide private network solutions for airport, ports, logistics, power generation, transmission, distribution and various manufacturing activities along with cyber security,” the Adani Group said last week.
Is Adani in the role of Mukesh Ambani?
Gautam Adani’s plan to bid for 5G airwaves is a big telecommunications play by Asia’s richest man, according to analysts at Jefferies Financial Group Inc.
They also note “uncanny similarities” with fellow billionaire Mukesh Ambani’s low-key, re-entry into telecom, which became India’s largest wireless operator after winning the spectrum auction in 2010.
While Adani intends to auction 5g spectrum for private use only, by obtaining a unified license it can offer commercial services in future, as the services a firm can offer depends on the license it holds, according to Jefferies.
Mukesh Ambani’s Reliance Industries (RIL) was required to obtain a unified license in 2013 to provide full connectivity services. In the past, telecom stocks have outperformed until revenue growth has been strong but have been de-rated closer to the service launch of new entrants, according to Jefferies.