Indian service providers and technology companies are hardening their battle lines over the distribution of 5G spectrum for private networks.

In a letter to Minister of Communications Ashwini Vaishnaw, the Cellular Operators Association of India (COAI) was clear.

"If independent entities set up private captive networks with direct 5G spectrum allotment by DoT, the business case of TSPs [telecom service providers] will get severely degraded," it read.

Figure 1: Service providers want to be the sole guardians of the 5G spectrum, but the technology companies are keen that the government allot them a share.
(Source: Per Bengston/Alamy Stock Photo)

"This will diminish the revenue so much that there will be no viable business case left for the TSPs and there will not remain any need for 5G networks rollout by TSPs."

Head to head

COAI is the apex body of service providers in India and counts Bharti Airtel, Vodafone Idea and Reliance Jio, among others, as its members.

The letter goes on to say that "wherever 5G has been rolled out [globally], there is hardly any consequent revenue increment from the retail segment. The revenue and efficiency enhancement can happen only from the Enterprise segment."

This is now one of the key reasons for the delay in the 5G spectrum auction. While service providers want to be the sole guardians of the spectrum, making it imperative for enterprises to go through them for private networks, the technology companies are keen that the government allot them a share.

The claims of service providers are countered by the Broadband India Forum (BIF), which represents technology companies including Cisco, Google, Facebook, Tata Consultancy Services (TCS) and Amazon, among others.

"It is a misconception that private 5G networks would lead to revenue losses for the Telcos, as expressed by certain entities. In actuality, in the present scenario, the majority of the enterprise revenues of TSPs would be through external network services which comprise voice and data communications," said the BIF in a position paper.

"Captive usage in the current situation would only contribute a minor share in processes/applications like robotics, automation, etc., due to challenges in delivering the required SLAs through public networks. Therefore, the speculated loss in revenues for telcos via enterprise services is a misplaced one," it added.

War of attrition

BIF's position paper also says that TSPs would be able to lease out a part of their spectrum to enterprises, which is in line with the global best practices in several countries, including Australia, Denmark, Finland, France, Germany, Malaysia, UK and USA.

Further, it says that businesses should set up the captive networks as they are "best qualified" to do so.

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With neither side showing any sign of relenting, the war for spectrum for captive networks will likely continue for some time.

The unyielding positions adopted by service providers and the technology companies are making it challenging for the government to resolve the issue and go ahead with the auction.

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— Gagandeep Kaur, contributing editor, special to Light Reading