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Captive networks: Tech companies trump service providers

The Union Cabinet’s decision to activate private 5G networks is a boon for digital tech companies with the Broadband India Forum (BIF), the leading think tank and policy forum for digital communications, hailing it as a “forward-looking step” and a “harbinger of digital transformation”, which is essential for digital India.

The industry body whose members include global tech giants like Google, Amazon, Meta and Indian companies like Tata Consultancy Services (TCS), RailTel, among others, had been a strong advocate for direct spectrum allocation for private 5G networks to businesses at a nominal administrative fee level, thwarting the position of telecom operators on the issue.

The Cellular Operators’ Association of India (COAI), on the other hand, had even written to Telecom Minister Ashwini Vaishnaw to address the matter, saying there would be no business case for rolling out 5G networks, in such a scenario. COAI represents major telecommunications service providers (TSPs) including Bharti Airtel, Reliance Jio and Vodafone-Idea.

“Will decrease income”

“Giving dedicated spectrum to private captive networks will make deployment of 5G services by TSPs unnecessary due to lack of business case. This will diminish revenue so much that there will be no viable business case for TSPs left and there will be no remaining need for TSPs to deploy 5G networks,” COAI Chief Executive SP Kochhar said in the dated letter. of June. 8.

The letter further stated that nationwide voice and data needs are being adequately met by TSPs through their 4G networks, and as such, TSP revenues will not increase by the segment. retail despite very heavy capital investments for 5G deployment. This is all the more accentuated as India is a very price-sensitive market.

“If private captive networks for enterprises are set up independently by other entities, it would mean radically altering the dynamics of the industry and damaging its financial health, and would strike at the very heart of the business case listed here. above,” the COAI letter added. .

More job opportunities

However, BIF said that directly giving spectrum for the creation of captive networks, without any reliance on TSPs, would accelerate the digital agenda.

TV Ramachandran, Chairman of BIF, said on Wednesday, “The decision underscores the government’s progressive vision and extremely forward-looking approach to utilizing and advancing technology to achieve India’s digital ambitions. As we seek to cement India’s position as a global hub for manufacturing, supply chain and R&D, as well as one of the leading digital economies across the globe, advancing business through dedicated captive private 5G networks will help drive efficiencies across all vital industries. vertical”.

This would leverage India’s geopolitical advantage for the achievement of our national missions of Aatmanirbhar Bharat and “Digital India,” he said. Ramachandran said more private networks would also lead to more employment and business opportunities, and in turn, result in greater production and economic benefits.

“Indispensable right”

Private networks would also provide an additional source of revenue for the government, through license fees and administrative fees paid for the spectrum assigned to them. The published spectrum auction notice also allows all four spectrum allocation methods for private 5G networks, as recommended by TRAI – including the ability for companies to obtain spectrum directly from of the DoT.

“This gives enterprises the much-needed right to develop their private 5G networks according to the specialized requirements of their distinctive captive use,” he added.

Activity area on May 31, reported that the stark difference between TSPs and tech giants seeking a private network further delayed the 5G auction process. It was supposed to start at the beginning of June, but it will now start from the end of July.

Published on

June 15, 2022