By Gagandeep Kauro
The hottest topic in Indian telecom industry is the surprising entry of the Adani Group in the coming 5G Spectrum Auction. While the group has categorically denied any plan to enter the consumer mobility space, there is uncertainty as it would not have had to participate in the auction if the intent was only to build. 5G private networks because of the many ports and airports across the country.
For Airtel, it brings back the trauma of struggling and market share erosion from 2016 to about 2020, when it had little choice but to match the bottom rates introduced by Mukesh Ambani-led Trust Jio. Only in the past year and a half has it been able to consolidate its market position and regain some lost ground. Another fight with a newcomer, with deep pockets, will certainly be a serious case of idiot for the company’s senior management at this stage.
Airtel said it has implemented two industrial-grade use cases for quality improvement and operational efficiency at Bosch’s state-of-the-art manufacturing facility, leveraging the pilot spectrum. In both cases, 5G technology such as mobile broadband and ultra-reliable, low-latency communications enabled automated operations, enabling faster scale-up and reduced downtime.
Still, it’s hard to imagine the company entering the consumer mobility space with just 5G services if there isn’t a great 5G use case for the consumer market. There are some Virtual Reality and Augmented Reality-based use cases, but most require additional devices and initial adoption will likely be limited. Yes, the provision of 5G has led to an increase in ARPU for some telcos, such as SK Telecom and China Mobile, among others. But these telcos have been present in their respective markets for decades with a good subscriber base and offer services across different technologies. Launching a new network with only 5G services seems highly unlikely, especially if there is no clear differentiation or use case.
Furthermore, even after nearly six years of launch, Jio is still struggling to acquire high-quality subscribers. In the past, telcos have tried to charge a premium for some services (for example, in the early stages of the 3G launch), but these attempts have largely failed. This further reduces Adanic The group’s prospects as it enters the consumer mobility space at a later date.
“If the independent entities set up private captive networks with direct allocation of 5G spectrum by DoT (Department of Telecommunications), it will reduce revenues so much that there will be no viable business case for the TSPs and no need for them to continue.” Rollout of 5G networks by TSPs,” the Cellular Operators Association of India (COAI) said in a statement on Thursday.
So perhaps the only viable way for Adani to enter the Indian consumer segment with 5G is through an acquisition and Vodafone Idea is largely considered an ideal candidate for this. But here again, the company’s huge debt and the investment it takes to get it back in the reckoning are uninspiring.Adani’s 5G private network Play
However, Enterprise 5G is a completely different case. The Adani Group can and most likely will only offer 5G-based business services. 5G offers exciting use cases across industries including healthcare, automotive, retail, and manufacturing. The segment of the 5G private networks itself makes it a great opportunity. According to Acumen Research and Consulting, the global market for 5G private networks is likely to reach a market value of approximately $31,589 million by 2030.
The Adani Group can very well provide 5G private network solutions to the enterprises after setting them up in its own companies. This puts it directly in competition with Bharti Airtel and Reliance Jio. It is also possible that they are targeting some industry verticals and not the entire market. Furthermore, the accelerated digital transformation of companies in the post-COVID world means that companies are much more open to trying out new technologies and use cases.
Ambani built up scale in consumer businesses such as telecom and retail to reduce the group’s over-reliance on refining and petrochemicals. Adani went after industrial and utility clients in transportation, coal and energy. But they now have overlapping ambitions, for example in the field of renewable energy and media.
The telcos could have easily gained an early lead by offering LTE-based private networks, which is still a growing market globally. According to Allied Market Research, it is expected to reach $10.64 billion by 2017, growing at a CAGR of 13.9% from 2020 to 2027.
Whatever the future plans of the Adani Group, no one can deny that the competitive action is moving to the corporate segment.
(The author is a freelance writer. Opinions expressed are her own)