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Home»5G»5G auctions: Telecom operators want to keep private networks out; loss of business to non-telcos prompts move
5G

5G auctions: Telecom operators want to keep private networks out; loss of business to non-telcos prompts move

By mulegeek-April 5, 2022No Comments3 Mins Read
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With the Telecom Regulatory Authority of India (Trai) expected to submit its recommendations on 5G auctions to the government in the next few days, the country’s three telecom operators, Reliance Jio, Bharti Airtel and Vodafone Idea, have hardened their stance over the possibility of the regulator suggesting that corporates — non-telecom firms — be allowed to set up their own private networks.

Sources said the three telecom operators have put up a joint opposition to any such move and indicated that if the same is allowed, their participation in the 5G auctions could be lukewarm. The reason cited is that if big corporates are allocated spectrum and allowed to set up their own networks, the major source of their future revenue stream would be hit, and therefore it won’t make sense for them to invest in 5G spectrum.

Under private networks, corporates can set up their own WiFi, data network instead of taking the services from any telecom service provider as is the norm today. However, for external communication, services of a telecom operator would be needed.

For setting up such private networks, companies would need 5G spectrum and if Trai allows such networks, the interested firms may not be required to participate in auctions but are likely to be allocated the spectrum at auction discovered price. That way, the issue of level-play field would be sorted out but telecom operators are of the view that since 5G is all about large-scale office automation, machine-to-machine communications, the bigger chunk of revenue would come from big corporates rather than retail customers. Therefore, they fear that if this lucrative market slips away from them, they would be reduced to “dumb pipes”.

Currently, enterprise segment revenues contribute around 20% to Bharti Airtel’s overall India revenues, and under 5G this would grow manifold if there’s no provision for building private networks. Bharti is the biggest player in the enterprise segment currently.

“It is like non-telecom firms getting into telecom business sans the regulatory maze,” an executive of a leading telecom firm said. “We buy spectrum through auctions and comply with conditions like roll-out obligations, security of network and other compliances mandated by the Department of Telecommunications. These conditions would not apply to the corporates, so where’s the level playing field?” the executive asked.

To allow building of networks, the licensing framework would need to be changed so that bandwidth can be provided and used for purposes other than providing direct services to consumers. Since the power to make amendments to the licensing provisions rests with the government and Trai can only make recommendations on this front, the former would take a final call in the matter.

Independent telecom analysts maintain that since private networks are similar to an intranet kind of network, there’s nothing wrong if the Trai and the government decide to allocate spectrum at auction determined price to corporates to set up their own networks.

The concept of private network is emerging as one of the most promising use cases of 5G. A white paper by Qualcomm had made a case for allowing such networks citing three major reasons. First, such networks guarantee coverage in remote locations where commercial network coverage is limited. Second, they lead to more network control, like applying configurations that are not supported in a public network and enterprises can retain sensitive operational data at premises. And third, private 5G networks would be able to meet better performance profile.

5G 5G auctions 5G spectrum telecom operators telecom regulatory authority of india Trai
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