Industry body BIF batted for direct allocation of spectrum for private 5G networks to enterprises at a nominal administrative fee, as the war of words intensified between telcos and tech companies.
According to COAI, there is no case to alienate spectrum directly to companies for captive private networks
Telcos point to global trends and contend that 40 per cent of 5G revenues are expected from the enterprise segment and captive 5G networks will make 5G rollout unviable
New Delhi, NFAPost: Industry body Broadband India Forum (BIF) batted for direct allocation of spectrum for private 5G networks to enterprises at a nominal administrative fee, as the war of words intensified between telcos and tech companies on the vexed issue of captive networks ahead of spectrum auction for next-generation services.
Dismissing the position of telecom operators on the matter, Broadband India Forum (BIF) argued that the stance that private 5G networks would lead to revenue losses for the telcos, as expressed by certain entities, is a “misconception”.
BIF also said indoor private campus networks do not truncate legitimate revenue of the telecom service providers but help to enhance productivity and efficiency.
In fact, a more efficient captive network through private 5G would lead to increased productivity for the enterprise, which would help grow business activities and external communications, in the process driving better revenues for the telcos, it said.
BIF has urged the government to earmark a certain amount of exclusive spectrum for non-public/private 5G networks in each type of spectrum band, as recommended by sector regulator TRAI.
It has made a passionate plea for direct allocation of spectrum to enterprises and organisations at a nominal administrative fee, citing global best practices.
“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,” BIF said in its latest position paper on captive private 5G networks.
Describing itself as a technology neutral and service agnostic entity “with no bias or inclination towards any organisation/ service/ technology/ vertical”, BIF emphasised that India needs private 5G to accelerate digital transformation, ‘Atmanirbharta’ and Industry 4.0.
India needs higher efficiencies in verticals like manufacturing, healthcare, education, agriculture, financial inclusion and many others areas to accelerate the process of digital transformation, which is a national priority.
“This can best be achieved only through use of private 5G networks,” it said, giving point-by-point rebuttal to arguments put forth by telecom operators who have maintained that there is no justification for allocating radiowaves directly to enterprises for operating private captive networks.
Mobile operators are of the view that as licensed telcos, they are fully capable of providing all customised solutions in the most competitive and economic manner to private and public sector entities.
Countering this, BIF said “private 5G networks are best setup by enterprises themselves as they are the best qualified to do so.”
Citing an example, it said a Maruti or an Apollo would know its system and requirements far better than anyone else, and therefore, would be able to customise and design the network and applications accordingly.
Most of the revenues of the telcos are external and that remains completely untouched, and hence they remain protected as does government revenue, it said.
The non-public networks or private networks constitute additional revenue streams for the telcos and government. This revenue stream has not yet been tapped, BIF observed.
“There would be no revenue loss to the Government on account of direct spectrum allocation for private 5G networks to enterprises, as they shall purchase the spectrum at a price to be fixed by the Government and allocated administratively,” it added.
No reason for direct allocation of 5G spectrum to enterprises: COAI
Meanwhile, industry body Cellular Operators Association of India (COAI) said there was no justification for allocating radiowaves directly to enterprises for operating private captive networks, and that licensed telcos are fully capable of providing all customised solutions in the most competitive and economic manner to private and public sector entities.
The comments of COAI — whose members include Reliance Jio, Bharti Airtel, and Vodafone Idea — assume significance as telcom operators and tech companies have locked horns over the hotly debated issue of 5G spectrum allocation and captive private networks.
Private enterprises have asserted that giving spectrum directly for creation of captive networks, without any dependency on telcos, would accelerate the digital agenda.
Refuting this stand, COAI, in its position paper on 5G private networks, has urged the government not to reserve or de-license any spectrum which has been identified or likely to be identified for use of mobile services, towards private captive networks.
Doing so, COAI said, would amount to “undue advantage to private commercial entities at the cost of government exchequer”.
Moreover, it would lead to arbitrariness in basic policies “discouraging investment in the networks and leading to disorderly growth of the sector by back door entry, with undue advantage, to private commercial entities at the cost of the government exchequer”.
At present, the means for operating such private network are made available from the resources of licensed telecom service providers which include spectrum acquired through a transparent auction process.
“We are of the firm opinion that notwithstanding any advancement of technologies, there is no justification whatsoever for allocating spectrum to industry verticals for operating private captive networks,” COAI said in the run-up to 5G spectrum auctions. The auctions for 5G spectrum are slated to be held mid this year.
The licensed access service providers are fully capable of providing all customised solutions including machine to machine (communications) and industrial 4.0 services in the most competitive and economic manner, and are in fact providing such network configurations to private and public sector entities.
According to COAI, there is no case to alienate spectrum directly to companies for captive private networks. Any de-licensing/reservation of spectrum for captive industrial use or establishment of private networks, would not only cause huge loss to the exchequer but will also lead to sub-optimal utilisation of this scarce resource, COAI wrote.
Such move is not only technically uncalled for but also legally untenable, it claimed.
“Hence, such a move is also technically uncalled for. Sufficient unlicensed spectrum bands are available to cater these private network requirements for captive networks,” it added.
COAI went on to say that in today’s scenario there is no need for separate private captive networks, and same should be dispensed with given the availability of state-of-art telecommunication network.
“Private captive networks can be detrimental to national security. The licensed access service providers are fully capable of providing these services in most competitive and economic manner compared to private companies looking for such solutions,” COAI said in the position paper.
When a private network is part of a commercial network, it paves the way for orderly growth of the sector.
“Neither the legitimate revenue of licensed service provider is truncated nor there is any revenue loss to the Government exchequer in terms of payment for acquiring spectrum through auctions and payment of license fee and Spectrum Usage Charge (SUC),” it said.
This approach also adheres to the principle of “Same Service Same Rules”.
5G rollout unviable if captive private networks allowed, telcos tell govt
In a move which could jeopardise the country’s upcoming 5G spectrum auction, the Cellular Operators Association of India (COAI) sent a letter to Minister of Communications, Ashwini Vaishnaw, late evening on Wednesday, saying there will be “no business case for rollout of 5G networks” if captive private 5G networks are permitted.
In a blunt letter to the minister COAI – the apex body of telecom operators with Bharti Airtel, Reliance Jio, and Vodafone Idea Ltd as its key members – has made it clear that if independent entities set up private captive networks with direct 5G spectrum allotment by DoT, the business case of telecom operators will be “severely degraded”. They have made it plain in the letter that “this will diminish the revenue so much that there will be no viable business case left for the telecom service providers (TSPs) and there will not remain any need for 5G network rollout by them.”
COAI has explained to the minister that wherever 5G has been rolled out there has hardly been any consequent revenue increment from the retail segment. The revenue and efficiency enhancement can happen only in the enterprise segment.
The move is significant as a bevy of Indian companies through Broadband India Forum have been pushing the government to allow captive private networks like in other parts of the world for enterprises. They have argued that it will be a win-win situation for both TSPs as well as companies as they move towards a new industrial revolution.
They have argued that since these networks will only be for captive usage (like machine to machine, robots), they will still need the services of TSPs for external connectivity and therefore there will be no loss of business. But telcos have pointed out that that based on global trends 40 per cent of the revenues from 5G come from enterprise segment. Therefore, if captive private networks are allowed there will be no reason for them to set up 5G networks, especially as they have been asking for spectrum at administrative price.
(Agencies)
