The Union Cabinet’s decision to enable private 5G networks is a boon for digital tech companies with the Broadband India Forum (BIF), the leading think-tank and policy forum for digital communications, hailing it a “forward-looking step”, and a “harbinger of the digital transformation”, which is critical for digital India.
The industry body whose members include global tech giants like Google, Amazon, Meta and Indian companies such as Tata Consultancy Services (TCS), RailTel, among others, had made a strong pitch for direct allocation of spectrum for private 5G networks to enterprises at a nominal administrative fee, countering telcos’ stand on the issue.
Podcast | What are private captive networks and how will they help in expanding India’s 5G networks
The Cellular Operators’ Association of India (COAI), on the other hand, had even written to Telecom Minister Ashwini Vaishnaw to address the issue, saying there will be no business case for the roll-out of 5G networks, in such a scenario. COAI represents leading telecom service providers (TSPs) including Bharti Airtel, Reliance Jio and Vodafone-Idea.
‘Will diminish revenue’
“Giving away dedicated spectrum for private captive networks will render the roll-out of 5G services by the TSPs needless because of lack of business case. 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 roll-out by TSPs,” SP Kochhar, Director General, COAI, said in the letter dated June 8.
The letter further had said that the needs of voice and data of the entire nation is being adequately met by the TSPs through their 4G networks, and as such the revenues of TSPs are not going to increase from the retail segment despite very heavy capital investments for 5G rollout. This is further accentuated because India is a highly price sensitive market.
“If private captive networks for enterprises are set up independently by other entities, then this would mean dramatically altering the industry dynamics and hurting its financial health, and will strike at the very heart of the business case enumerated above,” the COAI letter had added.
More job opportunities
However, BIF said giving spectrum directly for creation of captive networks, without any dependency on TSPs, would accelerate the digital agenda.
TV Ramachandran, President, BIF, on Wednesday said, “The decision underlines the government’s progressive vision and an extremely forward-looking approach towards use and advancement of technology to fulfil India’s digital ambitions. As we look to cement India’s position as a global hub for manufacturing, supply chain and R&D, as well as one of the leading digital economies across the world, the advancement of enterprises through dedicated captive private 5G networks will help gain efficiencies in all vital industry verticals.”
This would leverage India’s geopolitical advantage towards attainment of our national missions of Aatmanirbhar Bharat and ‘Digital India’, he said. Ramachandran said more private networks would also lead to more employment opportunities and business, and in turn, translate into greater economic output and benefits.
‘Much-required right’
Private networks would further provide an additional source of revenue for the government, through the license fees and administrative costs paid for the spectrum allocated to them. The notice inviting applications for the spectrum auction released also permits all the four methods of allocating spectrum for private 5G networks as recommended by TRAI – including the option of enterprises obtaining spectrum directly from the DoT.
“This provides enterprises the much-required right to develop their private 5G networks based on the specialised requirements for their distinctive captive use,” he added.
BusinessLine on May 31, had reported that the strong difference between the TSPs and technology giants seeking private network has delayed further the auctioning process of 5G. It was supposed to start in early June, but now will kickstart from July-end.