Telcos & BIF at loggerheads on 5G private networks

Indian telcos and the Broadband India Forum (BIF) are at loggerheads on the issue of private networks with the latter, comprising of members such as TCS, Amazon and Meta among others, stating that private networks were revenue generators for the government and would not pose a security threat as the networks were closed and disconnected from public telecom networks.  

In a position paper, Broadband India Forum has emphasised that the government should have a forward-looking approach towards use and advancement of technology, while asking the government to earmark certain amount of exclusive spectrum for private 5G networks in each type of spectrum band.  

“Allow direct allocation of spectrum to enterprises/organisations at nominal administrative fee, as per global best practices,” it said. “Facilitate a light-touch online portal based paperless regime for acquiring permission/license for ‘Captive Wireless Private Network (CWPN)’ within 30 days of application, (as recommended by TRAI) to enable ease of doing business,” the body led by technology companies has said.  

It has argued that private 5G networks were best setup by enterprises themselves since public networks can’t deliver the levels of efficiencies required. It further said that such networks would constitute additional revenue streams for the telcos and the government, since they will purchase the spectrum at a price to fixed by the government and allocated administratively.  

The forum noted that the perception that spectrum can be assigned only through auction is grossly inaccurate and misleading, referring to the Supreme Court guidelines on spectrum allocation issued in 2012.  

It added that private 5G networks were not permissible for external communications and the need for lawful monitoring, interceptions and the possibility of threats to national security do not arise at all.

Indian telcos on the other hand, have written to the government against direct allocation of 5G airwaves to private companies as it will adversely impact the enterprise businesses of telecom companies and will leave no business case for the carriers to rollout 5G services.  

In a communication to telecom minister Ashwini Vaishnaw, the Cellular Operators Association of India (COAI) which represents Reliance Jio, Bharti Airtel and Vodafone Idea, has sought government’s “urgent intervention” to protect the interest of telcos.  

The association said that giving away dedicated spectrum for private captive networks will hurt the financial health of the industry which is on the path of revival after the government’s relief package last year.

“We request your urgent kind intervention in the matter so as to ensure that the interest of the TSPs as well the enterprise segment is efficiently catered to,” the association said in a letter to the minister on Thursday.  

This comes in response to private companies such as Tata Consultancy Services seeking direct allocation of 5G spectrum, following recommendations of the Telecom Regulatory Authority of India (TRAI) that had left it to the government to either license out the airwaves directly or through a leasing model via existing telcos. The telecom department has taken an internal view that telcos were best suited to provide the services to private companies, however a final decision on the matter is yet to be taken.

The association had on Wednesday said in a position paper that there was no justification for allocating radiowaves directly to enterprises for operating private captive networks, and that licensed telecom companies are fully capable of providing all customised solutions in the most competitive and economic manner.

“If independent entities set up private captive networks with direct 5G spectrum allotment by DoT, the business case of TSPs (telecom service providers) will get severely degraded... This will diminish the revenue so much that there will be no viable business case left for the TSPs and there will not remain any need for 5G Networks rollout by TSPs,” the association said in the letter to the ministry sent on Thursday.  

“If private captive networks for enterprises are set up independently by other entities then this would mean dramatically altering the industry dynamics and hurting the financial health of the industry and will strike at the very heart of the business case,” it further stated.

The association has said that worldwide, statistically, wherever 5G has been rolled out, any consequent revenue increment has not come from the retail segment but rather only from the enterprise segment. It further argued that revenues of telcos are not going to increase from the retail segment despite very heavy capital investments for rollout of 5G networks, which will get accentuated further because of the high price-sensitivity of the market.  

“The new segment that would be benefitted by 5G services of the TSPs is the enterprise segment including manufacturing, logistics, education, hospitals, campuses, factories, etc. Our TSP members have also conducted successful 5G trials for many of these use cases in the last one year,” the association said, noting that with 5G auctions, telcos were targeting the enterprise segment for revenue enhancement.