Adani group faces DoT scrutiny over delayed 5G rollout and compliance issues

According to a Moneycontrol report, Adani Data Networks, a subsidiary of Adani Enterprises, has received several notices from the government concerning its non-compliance with minimum rollout obligations (MRO) for 5G services.

Adani Data Networks acquired 400 MHz in the 26 GHz band during the July 2022 spectrum auctions for Rs 212 crore.

The allocation includes 100 MHz each in Gujarat and Mumbai and 50 MHz each in Andhra Pradesh, Rajasthan, Karnataka, and Tamil Nadu.

While the company holds a unified licence to provide telecom and internet services, it initially planned to use the spectrum to establish captive private 5G networks to optimise its business operations.

In India, telecom companies typically use the 26 GHz band for fixed wireless access (FWA). However, the spectrum acquired by Adani is deemed insufficient for large-scale FWA deployment.

The Adani Group has yet to announce a timeline for its 5G service launch. Citing insider sources, the Moneycontrol report indicates that the group is considering relinquishing its 26 GHz spectrum acquired in 2022.

Although the company has not formally conveyed this to the government, it has reportedly informed DoT officials that implementing captive private 5G networks across its operations – encompassing ports, airports, power plants, and logistics – is economically unfeasible.

Reports further suggest that Adani has paid spectrum dues and penalties incurred for missing rollout deadlines.

Despite the delays, the government currently has no plans to revoke Adani's telecom licence.

The group's strategy has faced hurdles, with sources highlighting concerns about insufficient returns on investment, rendering the spectrum's deployment commercially impractical at this point.

As per auction regulations, telecom operators are required to launch commercial services within their licensed areas within one year of obtaining the spectrum.

Non-compliance results in escalating penalties starting at Rs 1 lakh per week for the first 13 weeks, increasing to Rs 2 lakh per week for the next 13 weeks, followed by a show-cause notice and additional penalties. Current rules allow spectrum surrender only after 10 years, though trading is permissible after two years.