Ambani vs Adani in 5G auction but no direct market clash yet
New Delhi:
For years they revolved around each other, but now the group led by billionaires Mukesh Ambani and Gautam Adani will be in direct competition for the first time when they are able to provide fifth generation or 5G telecom services later this month. Participate in the auction of airwaves.
But the rivalry between the two politically well-connected Gujarati businessmen will not see a complete confrontation in the market despite the overlap.
On Saturday, the Adani Group confirmed plans to participate in the July 26 5G spectrum auction, but said the airwaves it was seeking would help digitize its businesses from airports to energy to data centers. for setting up a private network.
This was meant not to enter the consumer mobile telephony sector, where Ambani’s Reliance Jio is the largest.
Media statement on Adani Group’s interest in 5G sector. pic.twitter.com/iyAmvJOf2T
— Adani Group (@AdaniOnline) 9 July 2022
Along with Jio, telecom czar Sunil Bharti Mittal’s Bharti Airtel and Vodafone Idea Ltd – the other two leading telcos in the country – have also applied to participate in the 5G auction, three sources with knowledge of the matter said.
While all three will bid for Corner spectrum to support a pan-India rollout of 5G voice and data services, Adani will compete to get the same airwaves for private captive networks.
Incidentally, telcos preparing for auction strongly opposed any direct allocation of spectrum to non-telecom entities for setting up private captive networks as it would seriously impact their businesses.
They wanted non-telcos to lease spectrum from them or set up private captive networks for them. But the government weighed in in favor of private networks.
The country’s richest – the Adanis and the Ambanis – took the opposite approach to business diversification, which has seen increasing overlap in recent months.
While Mr. Ambani, 65, expanded from oil refining and petrochemical business to consumer-facing telecommunications and retail businesses, Adani moved from operational ports to coal, energy distribution, airports, data centers and more recently, cement and copper production. brought diversity.
Mr. Adani, 60, has set up a subsidiary in recent months to foray into petrochemicals – a business that was started by Ambani’s father Dhirubhai before operating downstream and upstream.
Mr Ambani has also announced multi-billion dollar plans for new energy business, including giga factories for solar panels, batteries, green hydrogen and fuel cells.
Mr. Adani, who had earlier announced plans to become the world’s largest renewable energy producer by 2030, also revealed hydrogen ambitions.
However, sources said there is an overlap in the clean energy sector, but there is no direct competition between the two.
While the Adani Group wants to split water using solar power to produce green hydrogen, Mr Ambani’s Reliance is producing hydrogen from natural gas and other hydrocarbons backed by carbon capture and storage.
A source asked, ‘Where is the direct competition. “Adani will desalinate sea water for use in electrolyzers to produce green hydrogen, while Ambani is looking to decarbonize his oil business.” Another source said that while they will face each other in the spectrum auction, there will be no direct competition on the ground.
Reliance owns the world’s largest refining complex at Jamnagar in Gujarat and is also a major manufacturer of polymers, polyesters and fiber-intermediates. Adani, on the other hand, is focusing on coal in the hydrocarbon sector with mines and thermal power plants in India, Indonesia and Australia.
While Mr Ambani made several investments in the clean energy sector, Adani’s petrochemical ambitions failed twice – the Covid pandemic put on hold the $4 billion acrylic complex near Mundra in Gujarat, which is planned by BASF SE, Borealis AG and Abu Dhabi. It was created in collaboration with DHABI. National Oil Company (Adnok) and a plant of Taiwan’s CPC Corp also did not make much progress.
But their balance sheets are quite different. While Adani Group firms have borrowed, Ambani has channeled cash generated from the traditional oil refining and petrochemical business into newer areas.
Ambani raised $27 billion in 2020 from Facebook, Google and several private equity funds.
Adani, which has sold a stake in renewable energy firm, gas distribution company and new energy unit to France’s TotalEnergies SE, is not far behind with $17 billion spent on 32 acquisitions.
On Saturday, Adani said the spectrum it intends to buy will “provide private network solutions along with enhanced cyber security in airports, ports and logistics, power generation, transmission, distribution and various manufacturing operations”. Is.”
The Adani Group plans to use Airwaves for its data centers and is also building super apps to support businesses ranging from power distribution to airports, gas retailing to ports. Used to be.
“As we build our own digital platform incorporating SuperApps, edge data centers, and industry command and control centers, we will see ultra high quality data streaming through high frequency and low latency 5G networks across all of our businesses. Capabilities will be required,” it had said. in a statement.
But all this doesn’t mean a market clash with Mr. Ambani just yet.
(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)