A conflict is building in India over how spectrum should be allotted for 5G private networks. The Indian government has yet to decide how to allocate 5G spectrum for building private networks for enterprises.
Media reports suggest that the top three private telcos, Reliance Jio, Bharti Airtel and Vodafone Idea, have indicated to the government that their participation in the forthcoming 5G spectrum auctions will be muted unless and until the Government ensures that the spectrum will not be handed to enterprises for setting up 5G private networks.
This comes at a time when the telecom regulator is close to sharing recommendations on 5G auctions. India is all set to hold 5G spectrum auctions in the coming month and the allocation of the 5G spectrum for private networks has emerged as a major inflexion point between the telcos and the enterprises.
The telcos' perspective
The telcos reason that while the 5G use case for consumers is yet to emerge, private networks is one of the biggest 5G use cases in the enterprise segment. However, they stand to lose if the enterprises do not participate in the auctions and can acquire the spectrum directly from the government at minimal administrative rates. Therefore, the telcos allege that spending a massive amount to acquire spectrum is not justifiable if enterprises are able to acquire spectrum by paying a small amount.
"The licensed Access Service Providers are fully capable of providing all customized solutions, including M2M/Industrial 4.0 services, in the most competitive and economic manner and, in fact, providing such network configuration to private and public sector entity. Hence, there is no need to alienate spectrum directly to companies for private network," says the Cellular Operators Association of India (COAI) in response to the Telecom Regulatory Authority of India's (TRAI) consultation paper on Auction of Spectrum in Frequency Bands identified for IMT/5G.
As per Indian laws, the spectrum can be owned by service providers only. Telcos want to ensure that this continues, so any enterprise interested in setting up a 5G private network will not have any option but to take their services.
Recently, Larsen & Toubro Smart World and Communications (L&T) partnered with Vodafone Idea for setting up a private wireless network. Not too long back, Nokia had to partner with BSNL and Airtel to build a private wireless network at its Chennai factory using 4G LTE in the 2100 MHz frequency band.
The telcos want to safeguard their monopoly on the spectrum, so any enterprise interested in setting up 5G private networks will have no option but to go through them. They allege that this ensures a level playing field with the telcos who spend a massive amount to procure spectrum and set up networks.
Even as the conflict shows no sign of abating, the telcos continue to build competencies in the enterprise segment. For example, Airtel recently launched the #5Gforbusiness initiative to demonstrate 5G use cases for enterprises. It has also collaborated with Tata Consultancy Services and Tech Mahindra to be better positioned to develop solutions for different industry verticals. Similarly, Vodafone Idea has recently collaborated with A5G Networks to enable Industry 4.0. The two companies have set up a pilot private network in Mumbai using 4G spectrum.
The enterprise viewpoint
While the telcos believe the spectrum should be auctioned and licensed, technology companies believe that the spectrum should be offered at administrative rates to enterprises that want to build 5G private networks for their own use.
"Direct licensing of earmarked spectrum, is likely to enable a greater number of use cases for NPNs, while also providing certainty to enterprises on the availability spectrum access for the duration of the licenses," says National Association of Software and Service Companies (NASSCOM) response to TRAI's consultation paper.
The enterprises also point out that most countries, including Germany, Japan, Australia and the United Kingdom, have reserved spectrum for 5G private networks, which doesn't require them to participate in auctions. Enterprises are also free to purchase spectrum in the United States.
However, while telcos want to ensure their monopoly on the 5G spectrum, they also need to think about why they did little to promote 4G private networks. There are hardly any 4G private networks in India. With the 5G spectrum auction likely to be held next month, this conflict between the service providers and the enterprises is expected to intensify.