In a dramatic turn of events, Gautam Adani, chairman of the Adani Group, has decided to exit the fiercely competitive and capital-intensive telecom industry. After entering the telecom arena in 2022 with grand ambitions, the business mogul has now opted to sell the spectrum acquired in the auctions to Bharti Airtel. The Adani Group’s subsidiary, Adani Data Networks, had purchased 400 MHz of airwaves in the 26GHz band for approximately Rs 212 crore. Now, this spectrum will be transferred to Airtel, marking the end of Adani’s telecom plans.
Adani Group, which initially expressed intentions to use the airwaves for “captive use,” faced mounting pressure as the Department of Telecommunications (DoT) raised concerns about potential penalties due to non-compliance with minimum rollout obligations tied to spectrum acquisition. To avoid such penalties, the group has chosen to exit the sector and divest the spectrum. Airtel has entered into an agreement with Adani Data Networks, which allows the telecom giant to acquire rights to use 400 MHz of spectrum across multiple regions, including Gujarat, Mumbai, Andhra Pradesh, Rajasthan, Karnataka, and Tamil Nadu.
“The closing of the transaction is subject to the satisfaction of the standard conditions (including conditions stated in the spectrum trading guidelines) and statutory approvals,” Airtel said in its statement.
The Adani Group’s brief foray into telecom back in 2022 stirred up much speculation. Many industry watchers anticipated that the group might target stressed telecom companies, such as the struggling Vodafone Idea, through a strategic acquisition, although no such moves materialized. Adani, known for its aggressive growth in sectors like airports, cement, data centers, and power, was initially believed to be preparing a similar blueprint for the telecom and digital sectors, potentially challenging established players like Reliance.
However, the group’s official stance remained focused on using the spectrum for its own needs, primarily to establish a private network that would serve its other vast businesses, ranging from airports to power plants and data centers. As analysts observed, the significant investments and fierce competition within the telecom industry likely prompted the group to reconsider its initial plans. “Heavy investments and intense competitive nature of the business may have prompted them to stay out,” noted one analyst.
In the end, it appears that Adani Group’s strategic decision to concentrate on other high-investment sectors, rather than venturing into the high-stakes world of telecom, was the key factor behind this sudden shift in direction.
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