The battle between telecom operators and enterprises over private 5G networks is back. While telcos previously opposed direct spectrum allocation to enterprises for setting up captive networks, they are now opposing any form of licensing or authorisation framework for enterprises to build such networks.
The latest flashpoint follows a recent communication by the Telecom Regulatory Authority of India (Trai) to the department of telecommunications (DoT), seeking its views on whether enterprises should be granted an authorisation framework to establish private 5G networks. If approved, specific clauses would need to be incorporated into the telecommunications Act.
Telecom operators argue that private 5G networks are unnecessary in India, where telecom coverage is extensive. They claim that captive private networks are only relevant in countries with vast, sparsely populated regions, lacking reliable public telecom infrastructure. In India, where public networks already offer widespread connectivity, telcos insist that there is no justification for enterprises to operate independent 5G networks.
Technology companies, however, counter this argument, stating that telcos’ opposition stems from fears of losing business in the lucrative private 5G segment. If enterprises are granted direct spectrum allocation and authorisation, they could bypass telecom operators, leading to revenue losses for the latter.
Despite two years since the launch of 5G in the country, enterprise adoption of private networks has been slow. One reason for this is the absence of compelling use cases, particularly in the internet of things (IoT) domain, which has not witnessed a significant uptake. Additionally, many enterprises have found that 4G networks and Wi-Fi solutions are sufficient for their automation and connectivity needs.
Major technology firms, including Tata Communications and Capgemini, argue that large enterprises prefer autonomy over their networks rather than relying on telcos for leasing spectrum or other services. They advocate for a separate authorisation mechanism and direct spectrum allocation without auctions, asserting that enterprises should have control over their own networks without external dependencies.
A private 5G network, also referred to as a captive non-public network (CNPN), is designed exclusively for an enterprise’s internal use. Unlike public networks, private 5G networks operate in a closed environment, providing dedicated connectivity to industries such as manufacturing, healthcare, automotive, and fast-moving consumer goods (FMCG). This ensures seamless automation and operational efficiency within factory premises and corporate campuses, free from interference from public networks.
Telecom operators have consistently opposed the idea of direct spectrum allocation to enterprises, arguing that it would create an uneven playing field and allow technology firms an indirect entry into providing 5G services to businesses.
“India’s licensed telecom service providers (TSPs) are fully equipped to meet enterprise demand for 5G applications through advanced solutions such as spectrum leasing and network slicing. This approach allows multiple traffic types to be managed within a single public network,” said SP Kochhar, director-general of the Cellular Operators Association of India (COAI).
He further said that allocating dedicated spectrum for private networks would lead to inefficient utilisation of a national resource and result in unnecessary spectrum fragmentation.
Technology companies, however, argue that relying on telecom operators for private 5G deployment is not cost-effective. Additionally, they highlight the risks associated with sharing sensitive business data with external service providers.
“A separate authorisation framework is essential for enterprises because their service quality and security requirements are significantly high. They cannot be forced to depend on telecom operators, which do not understand their specific business models and would inevitably add margins, increasing costs,” said TV Ramachandran, president of Broadband India Forum.
Ramachandran further said that spectrum should be allocated administratively at a nominal price to enterprises, as they are not serving retail customers and only require the network for internal operations within their factories and campuses.
Rakesh Bhatnagar, director-general, Voice of Indian Communication Technology Enterprises (VoICE), echoed similar sentiments. “If Trai’s recommendations are accepted by the government, enterprises will no longer have to depend on licensed service providers. We already have over 10 domestic design-led players capable of deploying private 5G networks, and the demand is significant, with over 10,000 potential projects,” he said.
In its February 17 recommendations to the DoT, Trai proposed introducing a CNPN provider authorisation under Section 3(1)(b) of the Telecommunications Act, 2023. This would grant enterprises the right to establish, operate, and expand private 5G networks without relying on telecom operators. If the government accepts this proposal, it may seek further recommendations from Trai on the detailed terms and conditions for such an authorisation.
However, the DoT has previously rejected Trai’s recommendation to reserve a portion of 5G spectrum for private networks. In May 2023, the DoT allowed enterprises three options for deploying private 5G: leasing a network slice from telcos, obtaining all network services from telecom operators, or leasing spectrum directly from them.
As part of its earlier efforts to gauge industry interest, the DoT had received 20 applications in 2022 from companies such as Infosys, Capgemini, GMR, Larsen & Toubro, Tata Communications, Tata Power, and Tejas Networks. These enterprises sought direct spectrum allocation, mainly in the 3,300-3,670 MHz band, for setting up private networks. However, the DoT did not move forward with their requests.
