Vodafone Idea (Vi) and Adani Data Networks find themselves in a challenging position following their participation in the 2022 5G auctions. Both companies secured spectrum through their bids, but they are currently facing possible repercussions due to their failure to meet the minimum 5G rollout obligations as mandated by the Department of Telecommunications (DoT).
The stipulation set by the DoT required the winners of the spectrum to initiate 5G rollout in both the 26 GHz and 3.3-3.6 GHz spectrum within the first year. Specifically, this rollout was expected to encompass the launch of commercial 5G services in the three major metropolitan areas and at least one city in each of India’s 22 telecom circles.
However, as the August 16, 2023 deadline for meeting these obligations approaches, both Vi and Adani Data Networks have yet to fulfill their commitments. This non-compliance places them under scrutiny from the DoT, which will determine the appropriate course of action – whether to impose a financial penalty or potentially revoke the allocated spectrum.
Both telecom entities had previously sought exemptions from the DoT with regards to the minimum rollout obligations. Despite their requests, it is uncertain whether such exemptions will be granted. Notably, Vi’s situation is complicated by the fact that the Indian government is currently a major stakeholder in the company, which could influence the decision-making process.
It’s important to highlight that offering exemptions of this nature has no precedent, making this a unique situation. Vi has faced challenges in raising funds, leading to a lack of 5G orders from vendors. As a result, vendors are hesitant to extend further credit to the company. On the other hand, Adani Data Networks acquired the spectrum with a focus on B2B use cases, but deployment has yet to take place.
With the impending deadline of August 16 looming, the decisions made by the government will be closely observed. The outcomes could have far-reaching implications for both Vi and Adani Data Networks, the broader telecom industry, and the future of 5G rollout in India. As the telecom landscape evolves, these developments will undoubtedly shape the trajectory of 5G adoption in the country.
