The Government has favoured giving mobile operators control, only time will tell if it facilitates the growth of private networks
Private networks to be left entirely in the hands of telcos: The Department of Telecommunications (DoT) of the Indian Government has partially rejected the recommendations of the regulator, the TRAI, with regard to the upcoming allocation of spectrum for 5G across 10 bands. In particular, the DoT is asking the TRAI to reformulate its provisions on the allocation of spectrum for private networks. The DoT is against the option to allocate spectrum directly to private enterprises, and instead favours an approach whereby enterprises may only request operators to establish a private network at their premises, using an operator’s spectrum. The option to allow enterprises to obtain that spectrum on lease from operators is also ruled out, leaving operators with complete control over the spectrum for these use cases.
The DoT may have reached a compromise with the telecoms industry: Operators have been reportedly unhappy with the overall conditions for the upcoming 5G auction. In particular, the reduction in spectrum costs proposed by the TRAI was deemed insufficient – ranging between 35% and 40% across different bands, whereas operators were calling for reductions of up to 90%. As operators were threatening to desert the auction, this may have led the DoT to leave them more control over the market for private networks. This will be an important segment of 5G revenues for operators to tap into, especially since consumer use cases are slow to emerge and potentially more difficult to monetise. However, other stakeholders will not be happy with the DoT’s stance. The consultation held by the TRAI between November 2021 and January 2022 highlighted technology companies’ preference for a direct allocation of spectrum for private networks. This was also the viewpoint of some vendors such as Mavenir.
The TRAI pushes back with a new proposal: In its response to the DoT, on 9 May the TRAI accepted that direct allocation can be ruled out while a more comprehensive assessment of the demand is carried out. However, it proposed to leave the door open for enterprises to lease spectrum from MNOs, thereby giving them some control over the way they set up their private networks rather than leaving it entirely with MNOs. The regulator’s view is that the leasing option is important to realise the economic benefit of Industry 4.0. It remains to be seen whether the DoT will take this recommendation on board. Should it do so, it would align India more closely to the countries where all the spectrum has been assigned to mobile operators, but leasing requirements have been attached to those licences.
Source: https://trai.gov.in/sites/default/files/Recommendations.pdf
