Operators warn this decision will reduce their incentives to invest by undermining a potential future revenue source
Rules to facilitate private 5G networks: The Indian Government has approved Department of Telecommunications (DoT) plans for an upcoming multi-band 5G spectrum auction, which is due to begin towards the end of July 2022. The process makes available more than 72GHz of spectrum across the 600MHz, 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 3300MHz and 26GHz bands, with new licences valid for a 20-year period. The most notable feature of this award is that it will allow spectrum to be allocated directly (i.e. without auction) to businesses for private networks, referred to by the ministry as Captive Non-Public Networks (CNPNs). On 27 June, the DoT outlined guidance for licensees of CNPNs, which it claims can play a key role in automation and Industry 4.0 by providing “secure, ultra-reliable, low latency and high throughput communications through advanced technologies”.
The DoT has taken stakeholder recommendations on board: As previously discussed, the DoT had appeared to oppose directly allocating spectrum to enterprises, preferring to leave telcos with control over spectrum access. Having considered the views of stakeholders and recommendations of the TRAI (the telecoms regulator), the DoT seems to have adjusted its position. It has since highlighted the potential of private networks to support the development of 5G use cases in sectors such as construction, healthcare, manufacturing and transport. Provided a company has a net worth of INR1bn ($12.6m) and can pay the INR50,000 ($630) application fee, DoT guidelines mean they can apply to set up a CNPN in the following ways:
Operators provide CNPNs as a service to enterprises using network resources (e.g. slicing) over public mobile networks;
Operators establish CNPNs for enterprises using spectrum that they have acquired;
Enterprises lease spectrum from operators; or
Enterprises obtain spectrum directly from the DoT.
Operators anticipate competition from big tech: This fourth option has caused mobile operators particular discomfort. The Cellular Operators Association of India (COAI), the trade body for the country’s telecoms sector, has warned that such a move weakens the 5G business case for operators and reduces network investment incentives by undermining a potential future revenue source. The COAI is also concerned that direct assignments of spectrum to CNPNs could make for an uneven playing field by providing a backdoor for large tech players to enter the enterprise connectivity market while avoiding much of the regulation, fees and taxes faced by telcos. In addition, the DoT has removed spectrum usage charges and reduced reserve prices for the forthcoming auction, although by less than operators had requested. These decisions could have the effect of softening operators’ bidding activity and may even result in them making no offers for certain lots.
Source: https://dot.gov.in/circulars/guidelines-captive-non-public-network-cnpn-license
