The Cabinet has decided to allow enterprises to acquire spectrum directly from the government to set up captive private networks.
In the Notice Inviting Applications (NIA) released by the Department of Telecommunications (DoT), it has been specified that enterprises setting up captive private networks may obtain spectrum directly from the DoT and establish their own private networks.
This comes after the auction process has already been delayed by more than two months due to the intense lobbying by the telcos on this issue. Telecom operators had wanted a complete monopoly over the private network market, opposing the entry of new players.
After intense back and forth among operators and tech companies like TCS, Cisco, etc, it appears that the interests of the big tech have prevailed.
As per the NIA, the DoT has been instructed to conduct demand studies and thereafter seek recommendations from the Telecom Regulatory Authority of India (TRAI) regarding the direct assignment of spectrum to such enterprises.
A win for big tech?
A key caveat to the Cabinet’s decision, however, is that the timeline around when non-telcos will be able to provide private network services has now become uncertain. In TRAI’s earlier recommendations on the 5G spectrum, they had specified the exact spectrum bands which could be allocated to enterprises pending the DoT’s approval.
Now, the issue has again been kicked back to the regulator for further consideration before it will be approved by the DoT again. Therefore, it is hard to call it a clear win for tech companies, as it will delay the deployment of private networks for years potentially.
DoT’s demand studies and TRAI’s consultation and recommendation process could take months, in addition to which, DoT’s approval will be needed and the testing and trial process by the enterprises will take time. With this decision, the Cabinet has kicked the can on the private network issue further down the road.
Most of TRAI’s initial proposals around private networks are also part of the NIA. Telecom service providers have access to service authorisation and may provide private networks as a service through network slicing over their public networks.
They may also provide private network services for enterprises using the IMT spectrum acquired by them. Operators can also lease spectrum to enterprises who wish to set up their private network. Required Licensing Terms and Conditions and Spectrum Leasing guidelines will be released by the DoT.
Recouping investments
With the reserve prices for the 5G spectrum being immensely high, operators believe that they lack ample monetisation opportunities to recoup their investment without complete ownership of the private network market.
Experts on the other hand believe that there are ample opportunities available for operators and other private players in this space. To usher in industrial 4.0, it is important that all players are allowed to proliferate in this domain.
Private networks open a myriad of use cases for the industry in the coming decade. From automation of the manufacturing process to better safety features in hazardous working conditions to smart cities and smart utility grids.
Published on
June 15, 2022
