After energy, media and consumer goods, it's Adani vs Ambani in telecom

• Gautam Adani has thrown his hat in the 5G race, taking on Mukesh Ambani, Sunil Mittal and Kumar Mangalam Birla.
  
• If he succeeds, Adani will take on Ambani in yet another space after logging heads with him in energy, media and consumer goods.
  
• Interestingly, the Adani group also says this would count towards its ₹60,000 crore charity pledge.
  

The competition between Gautam Adani and Mukesh Ambani could soon enter yet another space – telecom, after India’s second richest person confirmed his participation in 5G spectrum auctions.

The race for the crown of India’s richest person has been neck-to-neck this year, with Gautam Adani blazing past Mukesh Ambani after an unprecedented surge in his wealth in the last one year. The two have regularly one-upped each other, and now Gautam Adani could be pulling out another rabbit from his hat with his bid for 5G spectrum.

Rumors have been flying thick and fast about the Adani group entering the 5G race, and now the Gautam Adani-led giant has confirmed it. The Adani group is the fourth company besides the telco trio of Reliance Jio, Bharti Airtel and Vodafone Idea to have submitted its bid for 5G spectrum.

“As India prepares to roll out next generation 5G services through this auction, we are one of the many applicants participating in the open bidding process,” the company said in a statement.


Adani wants 5G, but not for what you think

However, there is a twist in the tale before you get excited or annoyed at the prospect of Adani 5G – the company said in its statement that it is not interested in the consumer mobility space. And given the sort of competition already in this space thanks to Jio, Airtel and Vodafone Idea – and the deep pockets of Jio, the Adani group probably does not find it lucrative enough.

It sort of makes sense, too, given that experts think most of the money to be made in the 5G space will be in the enterprise segment, not consumer.

“India is a price sensitive market, so the revenue which is going to come to anybody who provides 5G, is from new segments opening up, and those are machine to machine communications, those are enterprise communications,” COAI director general Dr SP Kochhar said in an exclusive interaction with Business Insider India.

He added that enterprise services will likely contribute to 70% of 5G revenues, which will then be combined with the 30-40% revenue from consumer services to provide 5G services to consumers at almost the same rates as 5G.


Adani wants to use this towards his ₹60,000 charity pledge

In what seems like a slightly weird definition of charity, the statement by the Adani group says that if it wins 5G spectrum, it will count towards the Adani Foundation’s ₹60,000 crore pledge towards charity – this includes education, healthcare and rural development in rural areas.

However, here’s what the statement also says: “We are participating in the 5G spectrum auction to provide private network solutions along with enhanced cyber security in the airport, ports & logistics, power generation, transmission, distribution, and various manufacturing operations.”

Essentially, this covers the Adani group’s diversified business empire spread across all those industries.

However, it is not clear how the Adani group suggests this would also count towards its ₹60,000 crore charity pledge – unless the group is counting a portion of its 5G spectrum spends being used for CSR activities as well. Even then, it’s a very twisted logic at work here.

Regardless, it will be interesting to see how the Adani group’s 5G bid shapes up the telecom industry, which has voiced its opposition to private 5G networks already.

SEE ALSO:

5G spectrum auctions might not see a bidding war as there’s ‘enough’ for everyone

5G in India – does the aam aadmi even need it?

INTERVIEW: The big picture on 5G, Big Tech-telco war with COAI’s Dr SP Kochhar