India’s 5G spectrum auctions likely to be delayed yet again; Broadband India Forum weighs in

India’s 5G rollout is already behind schedule due to repeated delays (from early 2020) in the 5G spectrum auction.  It now appears that the auction will be delayed even further, resulting in even more delays in 5G rollout. The competing interests of telecom service providers (TSPs) and technology giants seeking private networks appear to have slowed the auctioning of 5G spectrum, causing the delay, according to a recent The Hindu Businessline report. 

The auction was meant to take place in early June, according to India’s Telecom Minister, but there would be a delay because the Cabinet has not yet adapted the TRAI’s plan. Because issuing the notice inviting applications (NIA) and holding stakeholder meetings can take at least 45 days from the date of Cabinet approval, the auction is unlikely to take place in June.

The main reason for the delay is that various industry bodies and tech giants have requested that the captive 5G networks be allocated to them. Despite the fact that 5G private network users’ spectrum allocation has been excluded from the upcoming auction, these players have addressed the government through their representative bodies. They argue that keeping them out of the country will adversely impact the country’s efforts to digitalize its economy and make its products more competitive in the global market.

The Broadband India Forum (BIF), whose members include Amazon, Cisco, Facebook, Google, Intel, Adani, and Reliance, among others, urged the government to provide this spectrum via an administered allocation route at a nominal rate or for free. Furthermore, TRAI recommended allocating 5G spectrum to enterprises for the construction of their own private captive networks, which they day improves industry efficiency.

The BIF urged the Government to provide these spectrum through administered allocation route at some nominal rates or give it for free. “We should think of the country, the consumer…it is the benefit of the consumer, efficiency of the enterprise and finally improvement of the economy. It (spectrum) is strictly for captive usage for improvement of efficiency,” said TV Ramachandran, President at BIF.

He said not only 5G, but captive network can be set up with 4G also, which the industry body has been requesting the government to open up. For instance, airports, ports, hotels and hospitals around the world use captive network to communicate within their campuses, and that gives faster response time, too.

Telecom Regulatory Authority of India (TRAI), in its recommendations, had also said that non-telecom enterprises would be allocated a 5G spectrum for building their private networks.

For captive network, spectrum is assigned to enterprises, is utilized within a limited geographic area. Therefore, it is also referred as spectrum for localized or local use. Spectrum assigned for localised private captive networks is used in such a manner that the signals are restricted within its geographic area and do not cause interference to other outside systems.

References:

https://www.thehindubusinessline.com/news/5g-spectrum-auctions-likely-to-get-delayed-yet-again/article65480631.ece

India’s 5G auction delayed again to April-May 2022 – Credibility Gap?

9 thoughts on “India’s 5G spectrum auctions likely to be delayed yet again; Broadband India Forum weighs in

  1. India should allot 5G spectrum directly to private firms, says TCS COO

    Tata Consultancy Services (TCS), India’s top information technology company, wants the government to directly allocate 5G spectrum to private enterprises, as recommended by the regulator. It ruled out participating in the upcoming 5G auction as rollout obligations make buying airwaves directly financially unviable.”Private networks for enterprises will enable organisations to accelerate their internet of things and digitalisation agenda,” TCS chief operating officer N Ganapathy Subramaniam told ET. “For this to happen in a secure manner and with a greater degree of control on their own data, government must consider allocating appropriate spectrum directly to enterprises for building private networks without any dependency on telcos and full freedom to unleash the potential for Industry 4.0 transformation.”This pits TCS against telecom operators such as Reliance Jio Infocomm and Bharti Airtel, which want airwaves to be auctioned to licensed entities.

    The telcos’ view has been backed by the Department of Telecommunications (DoT) and the matter will now be decided by the cabinet.Infosys, India’s second-largest software developer, is planning to lease 5G spectrum in key markets to deploy private networks for large enterprise customers. ‘C and mmWave Bands Conducive’ Infosys has practically ruled out the purchase of airwaves directly in a sale. Rivals such as Wipro and Tech Mahindra said they are also looking to partner carriers and companies as tech firms seek to participate in the next-gen technology. HCL Technologies added that it sees huge opportunities for industries leveraging the next-gen technology.Subramaniam said countries such as Germany, Finland, the UK, US, France, Sweden, South Korea, Hong Kong, Malaysia, Australia, Czech Republic, Japan, Taiwan and France have earmarked spectrum for private networks in the mid band (3.3-3.67 GHz) and 28 GHz millimetre wave (mmWave) band. If bandwidth is allocated directly, enterprises can choose the service or system integrators to build applications on the 5G technologies of private networks. Allocated spectrum can also be reused and given to various enterprises, the TCS executive said.The government is looking to auction 5G spectrum in the 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3.3-3.67 GHz (mid-band, or C band) and 24.25-27.5 GHz (mmWave) bands possibly in July and ring in the first 5G call in the August-September timeframe.The Telecom Regulatory Authority of India (Trai) has suggested that airwaves in the 3.7-3.8 GHz, 4.8-4.99 GHz and 28.5-29.5 GHz be earmarked for private 5G networks.Both TCS and Infosys said mid-band (C Band) and mm-Wave band are conducive to the deployment of private networks.91972728Trai Recommendations”Trai has given favourable recommendations to the government in terms of recognition of private 5G networks in India, allocation of spectrum for private 5G networks to enterprises as an option, relatively low reserve price for mmWave band spectrum,” said Subramaniam.But a senior DoT official recently ruled out direct allocation to enterprises and said that any company, even a non-telco, can participate in the 5G spectrum sale after taking a permit from the department.Subramaniam said that’s unlikely. “The rollout obligation recommended by Trai for mmWave band and mid-band spectrum is extremely discouraging for any new operator to participate in the forthcoming spectrum auction,” he said.While telcos with existing networks would be able to meet them, greenfield operators would find it difficult, especially when the usage is limited to enterprise use cases and applications, he said.”Thus, this prescription of minimum rollout obligation discourages the entry of new operators in the market and make the case for acquiring spectrum financially unviable,” Subramaniam said.The stakes are high with Swedish equipment maker Ericsson pegging the 5G-for-business opportunity in India at $17 billion by 2030. This includes connectivity, enablers like edge computing, and applications.”Infosys would be looking forward to spectrum leasing to have better control as it gives more agility and flexibility for innovations,” said Gopikrishnan Konnanath, global head, engineering services and blockchain.Since Infosys is heavily invested in private 5G use cases across multiple verticals such as manufacturing, retail, utilities, and healthcare, “having owned spectrum” would help it implement use cases in campuses effectively, he said.Wipro said it sees 5G connectivity as a key enabler of digital transformation.”Our current strategy is focused on enabling innovation for 5G equipment manufacturers, enterprises and CSPs,” according to a spokesperson. “We are actively investing in a number of industry use cases.”

  2. Why India’s 5G rollout could be in jeopardy? June 10, 2022

    As the government appears determined to roll out 5G services in India, telcos have opposed any move to set aside spectrum for captive private networks at an administered price.

    They argued that such a move would skew the playing field. On the other side of the fence are private network supporters like the Tatas, ITC and the Broadband India Forum, which counts major global tech players among its members.

    They have argued that assigning spectrum directly to enterprises is the only way to make Industry 4.0 a reality.

    Now, the latest blows in this battle over 5G captive private networks have been struck.

    In a move that could jeopardise India’s upcoming 5G spectrum auction, the Cellular Operators Association of India sent a rather blunt letter to the Minister of Communications Ashwini Vaishnaw on Wednesday. The letter said there would be ‘no business case for rollout of 5G networks’ if captive private 5G networks were to be permitted.

    COAI is the apex body of telecom operators with Reliance Jio, Bharti Airtel and Vodafone Idea as its key members. COAI has made its position clear — allowing independent entities to set up private captive networks with direct 5G spectrum allotment would ‘severely’ impact revenues and degrade 5G’s business case for telecom operators. It could even force telcos to relook at their 5G spectrum strategy, though most say they are unlikely to pull out from participating in the auction altogether.

    COAI letter has said that wherever 5G has been rolled out, there have hardly been any gains in revenue from the retail segment. Instead, revenue and efficiency enhancement can happen only in the enterprise segment, which involves the use cases that an enterprise could instead meet with its captive private network if allowed to.

    Telcos have said that based on global trends, 40 per cent of the revenues from 5G come from the enterprise segment. They fear that they would end up losing this chunk of revenue

    Telcos have also made other arguments against the direct allocation of 5G spectrum through administrative routes to enterprises for private captive networks.

    They have said that such a move would give a backdoor entry to private companies, do away with a level playing field, and rob the government of valuable revenues.

    Telcos decided to respond strongly after it seemed possible that the DoT could, in its note for cabinet approval, allow captive private wireless networks to be run by enterprises, as recommended by the Telecom Regulatory Authority of India earlier. If that happens, it would be a complete volte-face.

    Speaking to Business Standard, Lt Gen SP Kochhar, DG, COAI, says government will lose out on revenue due to lack of auctions. Administrative allotment would be in contravention to SC’s direction. Enterprises will probably outsource the setting up of private networks. This could allow an unlicensed entity that has not participated in the auctions to become a telco. Such an entity would also not be subject to the regulations meant for telcos.

    The technology companies have struck back. The Broadband India Forum, or BIF, on Thursday went to bat for direct spectrum allocation for private 5G networks at a nominal administrative fee.

    Going against the position taken by telcos, BIF argued that the stance that private 5G networks would lead to revenue losses for telcos was a ‘misconception’.

    BIF contends indoor private campus networks do not cut into the legitimate revenue of telcos. According to the industry body, an efficient captive network through private 5G would lead to increased productivity for enterprises. This would help grow business activities and external communications, leading, in turn, to better revenues for telcos.

    BIF has argued that most of the revenues accrued by telcos are external and that they remain untouched, and hence, government revenues also remain protected. Private networks constitute an additional revenue stream for both telcos and the government, it said.

    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

    Debashish Bhattacharya, Sr Deputy Director General, Broadband India Forum says private 5G networks are non-public networks. It is limited to a local area and has only one potential user in that given area. You cannot have an auction when there is only one user, he says. It is being misrepresented that SC has mandated that spectrum can only be assigned through auctions, he adds. SC has said auctions might be the best way of maximising revenues. The apex court has also said that revenue maximisation might not always be the best way to serve the public good. Digitalisation of all industries towards Industry 4.0 is the public good in this case. Additional license fee and spectrum usage charges paid by private networks will increase government revenues.

    The Business Standard Morning Show had earlier reported that the 5G spectrum auctions are likely to see a muted response from the telcos due to their unmet concerns over pricing. This could be a reason for the slowing down of 5G rollout in India, or at least, lead to an uneven spread of 5G services. The tussle over private captive networks will only add to the list of rollout roadblocks.

    Business Standard Limited (India)

  3. India’s auction of over 72 GHz of 5G spectrum will be held by July-end, said an official statement detailing the decision taken by the Union Cabinet headed by Prime Minister Narendra Modi at its meeting held on Tuesday.

    The spectrum auction will commence on July 26, 2022. Sources said that the Cabinet has approved 5G auctions at reserve prices recommended by the sector regulator, Telecom Regulatory Authority of India (TRAI). TRAI had earlier recommended about a 39% reduction in the reserve or floor price for the sale of 5G spectrum for mobile services.

    While the 5G spectrum in nine frequency bands will be auctioned to telecom operators such as Bharti Airtel and Reliance Jio, the Notice Inviting Applications — bid-related document issued by the Department of Telecom (DoT) — said big tech firms for the time being will be allowed to take the 5G spectrum for their captive non-public network, on lease from the telecom companies.

    The notice inviting offer said direct allocation to the big tech companies will follow a demand study and sector regulator TRAI’s recommendation on aspects such as pricing and modalities of such allocation.

    Big tech companies like Google have been seeking direct allocation of spectrum for applications such as machine-to-machine communications, IoT and AI, while telecom companies have been opposing direct allocation of 5G spectrum to them saying it will distort the level playing field and rob the government of revenues.

    “Enterprises setting up captive non-public network (CNPN) may obtain the spectrum on lease from TSPs [telecom service providers] having Access Service Authorisation and establish their own isolated network. Required licensing terms and conditions and spectrum leasing guidelines shall be issued by the DoT,” the Notice Inviting Applications said.

    As per the document, the government from time to time will publish required provisions and guidelines and licensing terms and conditions for enabling the setting up of captive non-public network.

  4. Union Communications Minister Ashwini Vaishnaw Vaishnaw at Viva Technology 2022 event said that India will get a full-fledged 5G services by March 2023.

    In an exclusive interview with ANI, Vaishnaw said that the auction of the 5G spectrum will be completed by July end, adding, “Telecom is the primary source of digital consumption and it is very important to bring trusted solution in telecom. India has its own stack of 4G like radio, equipment and handset. 4G is ready to deploy in the field and 5G is ready in the lab, and 5G will be ready to deploy in March 2023.”

    “The technology, core network behind 5G services should be built up by India, that would be an achievement for the country,” said Ashwani Vaishnaw.

    The Union Cabinet chaired by Prime Minister Narendra Modi has finally approved the Department of Telecommunications (DoT)’s 5G spectrum auction through which spectrum will be assigned to bidders to provide 5G services to the public as well as enterprises.

    According to a statement from the Ministry of Communications, it is expected that the Mid and High band spectrum will be utilised by Telecom Service Providers to roll-out 5G technology-based services capable of providing speed and capacities which would be about 10 times higher than what is possible through the current 4G services.

    The Minister said that the 5G spectrum auction will be completed by July end. “After the auction, we will have consultations with the telecom service providers and will try to come with 5G services as soon as possible, said Vaishnaw. On the 5G spectrum auction response, Minister said that he is hopeful that the 5G auction will get a good response from 5G service providers.

    A total of 72097.85 MHz of spectrum with a validity period of 20 years will be put to auction to be held by the end of July, 2022. The auction will be held for spectrum in various Low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), Mid (3300 MHz) and High (26 GHz) frequency bands.

    It is expected that the Mid and High band spectrum will be utilised by Telecom Service Providers to roll-out of 5G technology-based services capable of providing speed and capacities which would be about 10 times higher than what is possible through the current 4G services.

    The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved a proposal of the Department of Telecommunications to conduct spectrum auction through which spectrum will be assigned to the successful bidders for providing 5G services to public and enterprises.

    Digital connectivity has been an important part of policy initiatives of Government through its flagship programs such as Digital India, Start-up India, Make in India etc.

    Broadband, especially the mobile broadband, has become integral part of the daily lives of the citizens. This received a big boost through the rapid expansion of 4G services across the country since 2015. Eighty crore subscribers have access to broadband today compared to ten crore subscribers in 2014.

    Through such pathbreaking policy initiatives, the Government has been able to promote access to mobile banking, online education, telemedicine, e-Ration etc. to Antyoday families.

    Talking about the successful journey of the Unified Payment Interface (UPI), Minister said that a Memorandum of Understanding (MoU) has been signed between NPCI, International and Lyra Network of France for ‘Acceptance of UPI & Rupay Card in France.’ “The whole world is watching that India is doing 5.5 billion UPI transactions in a month. This is a big achievement for India. Today’s MoU with France is a big step towards the world,” he added.

    Vaishnaw said that Europe’s biggest start-up Viva Technology 2022 has recognized India as the ‘country of the year’.

    “Europe has recognized the vision that our Prime Minister Narendra Modi has started long back. The world wants to learn from India how fast India has developed this start-up ecosystem. Europe recognized India that how India has produced more than 100 Unicorns,” said Vaishnaw.

    Talking about the semiconductor chip manufacturing, the Minister said, “I am confident enough that within a few months we are going to sign the first agreement. I am going to Belgium to meet IMEC officials. Tomorrow we will be able to confirm their support for India. The world needs a trusted partner and India is the only country which can be their trusted partner. Today whole world looks towards India with positivity. If India is successful, then the world will be successful.”

    The availability of sufficient backhaul spectrum is also necessary to enable the roll-out of 5G services. To meet the backhaul demand, the Cabinet has decided to provisionally allot 2 carriers of 250 MHz each in E-band to the Telecom Service Providers. The Cabinet also decided to double the number of traditional Microwave backhaul carriers in the existing frequency bands of 13, 15, 18 and 21 GHz bands.

    The Cabinet also decided to enable the development and setting up of Private Captive Networks to spur a new wave of innovations in Industry 4.0 applications such as machine to machine communications, Internet of Things (IoT), Artificial Intelligence (AI) across automotive, healthcare, agriculture, energy, and other sectors.

  5. Now that the government has given its approval to the 5G spectrum auctions, it is reported that the Department of Telecommunications (DoT) will begin work on the Notification Invitation Request (NIA). Once this is published, the auction will start in a few weeks. While it is currently unknown when the launch of 5G services might occur, we do know that users will be able to experience them faster in 2022.

    It was previously reported that the 5G India rollout could start on August 15, but this does not appear to be happening. The commercial launch of 5G could happen in September, considering the current situation. Please note that 5G will not be available to everyone in the initial stage and will gradually become available across India.

    Don’t expect 5G to hit every corner of the country in a few months. The latest network could take years to reach everyone, something we’ve also seen with 4G. There are still some places where the 4G network is not available. Just a few days ago, the 4G network was rolled out in the Ladakh region for the first time.

    According to the Department of Telecommunications (DoT), 5G will first be rolled out in just 13 major cities in India. These include Ahmedabad, Bengaluru, Chandigarh, Chennai, Delhi, Gandhinagar, Gurugram, Jamnagar, Hyderabad, Pune, Lucknow, Mumbai, and Kolkata. Currently, it is not known which telecom operator will roll out 5G services first.

    The government has confirmed that spectrum totalling 72 GHz will be auctioned in various frequency bands, including 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 3300 MHz and 26 GHz.

  6. The Cabinet’s decision to allow direct spectrum allotments to independent companies for setting up captive private 5G networks is likely to lead to business uncertainty for telcos on enterprise service revenue streams, hit the overall 5G business case and limit their appetite for airwaves in the upcoming auction, top industry executives and analysts said.Enterprise services are seen as the prime 5G cash engine for the likes of Reliance Jio, Bharti Airtel and Vodafone Idea, estimated to generate around 40% of overall 5G revenue for telcos, said experts.But the move is seen as a major win for tech companies. “The option of obtaining spectrum directly from DoT, provides enterprises the much-required right to develop their private 5G networks based on specialised requirements for their distinctive captive use,” the Broadband India Forum (BIF) said.

    Telco Execs Flag Risks BIF counts Tata Consultancy Services (TCS), Cisco, Amazon, Google, Microsoft, Facebook-owner Meta, Qualcomm and Intel among its key members.But telco executives bemoaned the Cabinet decision, saying it could also lead to carriers losing out to tech players in grabbing lucrative smart factory/captive 5G network execution contracts. This, since telcos after buying expensive 5G airwaves in an auction might not be in a position to match tech companies on price on enterprise networks deals as the latter are set to gain the coveted airwaves at a nominal fee from the government.”Telcos need to rethink if there’s any business case left to invest top dollars in expensive 5G spectrum in 3.3-3.67 GHz band or develop/test 5G enterprise solutions since the crucial enterprise service revenues won’t come if private tech companies enter the same business and offer better rates on the strength of virtually free spectrum,” a top telco executive of one of India’s biggest telcos told ET. At press time, Airtel, Jio, Vodafone Idea did not respond to ET’s queries. Queries to industry body COAI also went unanswered.Jeanette Whyte, head of public policy (APAC) at the London-based telecom industry body GSMA, said, “Spectrum set-aside exclusively for enterprises in core mobile bands risks being underused and also adversely impacting spectrum availability and affordability for public 5G services.”92240784″It’s important that spectrum requirements for public networks for the citizens of India are not undermined,” she said, adding, “There is no firm evidence that private networks can be more effectively supported by spectrum set-asides.” The GSMA represents global mobile operators worldwide.In the runup to the 5G spectrum sale in late-July, telcos have been testing 5G industrial use cases. But they now feel these investments could become unviable as direct spectrum allotments to enterprises for captive networks would degrade their 5G business case.The Notice Inviting Applications-the main document containing all auction rules-says “enterprises setting up captive non-public networks (CNPNs) may obtain spectrum directly from DoT and establish their own isolated network”.This effectively means non-licensed companies may be able to directly acquire 5G spectrum from the government without having to buy it in an auction. But since the government has also said that DoT will seek the telecom regulator’s views on terms of such direct assignments, these direct airwave allotments to independent enterprises won’t happen immediately but possibly over a year-or-two.

  7. Telecom secretary K Rajaraman has said that 5G rollout is expected to begin in August once the auctions are conducted in July. He also illustrated the benefits of using an open radio access network (oRAN) for 5G deployment, adding that C-DoT, the research wing of the Department of Telecommunications (DoT), is working on developing an OpenRAN test-bed. “The government has announced the 5G spectrum auctions, and the rollout is expected from August this year,” he said, speaking at an industry event on Thursday. The Cabinet on Wednesday cleared the 5G spectrum auctions, accepting the spectrum reserve prices recommended by the telecom regulator, putting up around 72 GHz of airwaves for auction to rollout 5G services in India. The auction is set to take place from July 26. Rajaraman said C-DOT is working towards developing an oRAN test-bed.

    It has signed MoUs in four different formats and hopes that more Indian companies can come onboard this India oRAN alliance to develop India-specific oRAN use cases. C-Dot partnered with VVDN and WiSig on June 2, signing an MoU to develop indigenous 5G Open RAN products. Private telcos like Bharti Airtel, Vodafone Idea and Reliance Jio are also increasingly looking to expand their telecom gear supplier options beyond traditional equipment vendors by using OpenRAN technology. The adoption of OpenRAN technology will help these telcos cut network-related costs and allow them to bring more customization as they upgrade their networks for 5G technology”Every sector has an opportunity to drive new services, new products, and new experiences with 5G. For all this to happen, innovation on the edge has to be supported. Operators will have to evolve and transform to meet this increasing demand by evolving from closed and proprietary legacy architecture to open radio access network that offers interoperability and network flexibility at a lower cost,” Rajaraman said at the OpenRAN India 2022 conference. Counting the advantages of an open radio access network, Rajaraman said the technology means an expanded ecosystem with more vendors that will help usher in more innovations and more options for the operators. It also means more market propositions and increase in customer choices. Using OpenRAN architecture will also allow operators to opt for less expensive third-party products.

  8. 5G will open up opportunities for businesses

    India is set to join the league of 5G-enabled nations with the Union Cabinet approving the much-awaited airwave auction for ultra-fast mobile internet networks. With this, services requiring cutting-edge technology can be rolled out even in remote corners of the country, though initially 5G networks are likely to be available only in bigger cities. Deploying the internet of things to artificial intelligence, 5G will open up never-before opportunities from health care to education and agriculture for both consumers and businesses. India is already late in its 5G journey and the telecom industry must not lose time in complaining about issues such as enterprises getting a better deal than telcos or high reserve price for spectrum.

    On reserve price, although there is merit in telcos’ argument that most other countries have conducted the 5G spectrum sale at a much lower rate, the Cabinet decision on pricing is in sync with what the Telecom Regulatory Authority of India (Trai) recommended in April during a review of its earlier proposal and has also been endorsed by the Digital Communications Commission. While Trai in its April 2022 recommendation reduced the spectrum reserve price by more than 35 per cent from its 2018 level, the demand from telcos was a cut of around 90 per cent. Indeed, pricing could have been better to ensure that telcos don’t bleed while aggressively bidding for airwaves, the government has made amends elsewhere to address the cash flow concerns of the companies taking part in the auction slated to start at the end of July. The government has done away with the need for upfront payment for winning bidders. It will be spread over 20 years. The spectrum usage charges, earlier levied at about 3 per cent of the telco’s adjusted gross revenue, has been abolished for spectrum allocated under fresh auctions. Nevertheless, the 5G spectrum auction is billed as the biggest, and the upcoming sale of airwaves across nine bands including 5G frequencies, for 20 years, could fetch more than ~4 trillion at the base price. Trai has fixed the base price for the 3.5 GHz band — which is widely used for 5G — at ~317 crore/MHz, down from its 2018 recommendation of ~492 crore/MHz.

    Besides pricing, telcos are also upset that the government has allowed enterprises to run captive private networks with direct allocation of spectrum by the Department of Telecommunications. Enterprises have also been allowed to lease spectrum from telcos for their networks, prompting industry associations to slam the move. But an objective look at the scenario may show that telcos have over-reacted. Taking the global benchmark, most other countries are following a similar model of direct allocation of spectrum to enterprises, which make up for the bulk of the 5G revenues. Rather than protesting, telcos can also get spectrum allocated at a price without auction for their enterprise businesses. In fact, a recent study has made the point that enterprise services are emerging as a new value engine for telcos in the process of digital transformation. Every telecom service provider is expected to look at the enterprise opportunity, either on its own or in collaboration. The gains for the economy by allowing business enterprises to embrace 5G would be huge.

    The government had made the right start last year by offering a package to the telecom sector in view of the liquidity requirements of the industry, especially financially stressed Vodafone Idea. Although lower 5G pricing would have given a further fillip to the disrupted sector, the time has come for the Indian telecom industry to make the best of the opportunity knocking on its door.

  9. The Indian Cabinet’s decision to allow direct spectrum allotments to independent companies for setting up captive private 5G networks is likely to lead to business uncertainty for telcos on enterprise service revenue streams, hit the overall 5G business case and limit their appetite for airwaves in the upcoming auction, top industry executives and analysts said.Enterprise services are seen as the prime 5G cash engine for the likes of Reliance Jio, Bharti Airtel and Vodafone Idea, estimated to generate around 40% of overall 5G revenue for telcos, said experts.But the move is seen as a major win for tech companies. “The option of obtaining spectrum directly from DoT, provides enterprises the much-required right to develop their private 5G networks based on specialized requirements for their distinctive captive use,” the Broadband India Forum (BIF) said.

    Telco Execs Flag Risks BIF counts Tata Consultancy Services (TCS), Cisco, Amazon, Google, Microsoft, Facebook-owner Meta, Qualcomm and Intel among its key members.But telco executives bemoaned the Cabinet decision, saying it could also lead to carriers losing out to tech players in grabbing lucrative smart factory/captive 5G network execution contracts. This, since telcos after buying expensive 5G airwaves in an auction might not be in a position to match tech companies on price on enterprise networks deals as the latter are set to gain the coveted airwaves at a nominal fee from the government.”Telcos need to rethink if there’s any business case left to invest top dollars in expensive 5G spectrum in 3.3-3.67 GHz band or develop/test 5G enterprise solutions since the crucial enterprise service revenues won’t come if private tech companies enter the same business and offer better rates on the strength of virtually free spectrum,” a top telco executive of one of India’s biggest telcos told ET. At press time, Airtel, Jio, Vodafone Idea did not respond to ET’s queries. Queries to industry body COAI also went unanswered.Jeanette Whyte, head of public policy (APAC) at the London-based telecom industry body GSMA, said, “Spectrum set-aside exclusively for enterprises in core mobile bands risks being underused and also adversely impacting spectrum availability and affordability for public 5G services.”92240784″It’s important that spectrum requirements for public networks for the citizens of India are not undermined,” she said, adding, “There is no firm evidence that private networks can be more effectively supported by spectrum set-asides.” The GSMA represents global mobile operators worldwide.In the runup to the 5G spectrum sale in late-July, telcos have been testing 5G industrial use cases. But they now feel these investments could become unviable as direct spectrum allotments to enterprises for captive networks would degrade their 5G business case.The Notice Inviting Applications-the main document containing all auction rules-says “enterprises setting up captive non-public networks (CNPNs) may obtain spectrum directly from DoT and establish their own isolated network”.This effectively means non-licensed companies may be able to directly acquire 5G spectrum from the government without having to buy it in an auction. But since the government has also said that DoT will seek the telecom regulator’s views on terms of such direct assignments, these direct airwave allotments to independent enterprises won’t happen immediately but possibly over a year-or-two.

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