Ahead of the auction of 5G spectrum later this month, telecom companies have voiced their opposition to allowing private captive 5G networks and stated that such a move will make it unviable for them to roll out their 5G networks.
The Union cabinet had, on June 15, approved a proposal by the department of telecommunications to conduct spectrum auction for 5G services. A total of 72,097.85 MHz of spectrum with a validity period of 20 years is to be put to auction, beginning July 26.
The cabinet had also decided to enable the development and setting up of private captive networks. This, it had said, would spur a new wave of innovations in 'Industry 4.0' applications such as machine to machine communications, internet of things, artificial intelligence across automotive, healthcare, agriculture, energy, and other sectors.
Some of the top technology companies in India have been keen on deploying private 5G networks. While some have talked of leasing the same from telecom firms, a few others want direct allocation of the spectrum by the government. However, telecom companies say this is against the principle of level playing field.
“It is important to understand that licensed access service providers are fully capable of providing these services most competitively and economically, compared to private companies. Any consideration of administrative allocation of spectrum for such networks is fundamentally against principles of level playing field and effectively provides a backdoor entry to big technology players to provide 5G services and solutions to enterprises in India without equivalent regulatory compliance and payment of levies that telecom service providers are subjected to,” S.P. Kochhar, director general of the Cellular Operators Association of India (COAI) said on Thursday.
While the incumbent cellular operators – Bharti Airtel, Reliance Jio and Vodafone Idea – expectedly applied for the participation in the 5G auctions, billionaire tycoon Gautam Adani sprang a surprise earlier this month, by announcing plans to take part in 5G auctions. Adani Group later clarified that it had no plans to enter the consumer mobility space, but would use the spectrum for private 5G network solutions across ports, airports, power generation and its other businesses.
COAI, the body that represents telecom companies, expressed happiness that companies wanting to use 5G spectrum have made applications for open bidding of the spectrum through a transparent auction process.
But, if spectrum is allotted to enterprises directly, then it disturbs the level playing field and there would then be no need for the rollout of 5G by telecom service providers (TSP), Kochhar said.
“The spectrum should not be provided on administrative basis as it leads to no business case for the rollout of 5G networks in the country. If the independent entities set up private captive networks with direct 5G spectrum allotment by DoT, it will diminish the revenue so much that there will be no viable business case left for the TSP,” he said.
However, another industry body, Broadband India Forum, dismissed this call for a level playing field between telecom companies and captive private 5G networks, calling the demand irrational and absurd since the two were entirely different set of services.
“Seeking a level playing field with enterprises for captive private networks is akin to a child in kindergarten being asked to compete with someone who has a doctoral degree. Enterprises will not be in the business of selling services or earning revenues through private 5G networks, but only use it for self-consumption,” T.V. Ramachandran, the president of BIF has said.
