The resurgence of the dispute between telecom operators and enterprises over private 5G networks in India has brought new dimensions to the forefront. The Telecom Regulatory Authority of India (Trai) has proposed a significant change, suggesting that enterprises be allowed to set up private 5G networks independently. This recommendation has sparked a renewed debate among various stakeholders, raising fundamental questions about the future of 5G deployment in India. The core of the contention hinges on whether enterprises should have the autonomy to establish their private networks and how this potential shift could impact the broader telecom industry.
Telecom Operators’ Opposition
Telecom operators argue that allocating spectrum directly to enterprises is unjustified in India, primarily due to the extensive existing telecom coverage. They maintain that private networks are more suitable for countries with large, sparsely populated regions lacking reliable public infrastructure, which is not the case in India. From their perspective, the current telecom infrastructure sufficiently supports enterprise needs, thereby negating the necessity for separate private 5G networks. Furthermore, telecom operators emphasize the potential risks associated with inefficient utilization of national spectrum resources and spectrum fragmentation, which could arise from direct allocation to enterprises.
Operators also assert that they can meet enterprise demands for 5G applications through spectrum leasing and network slicing within the public network. By leveraging these methods, telecom operators can efficiently manage multiple types of traffic and ensure optimal use of the available spectrum. This approach, they argue, provides a balanced solution that avoids the pitfalls of direct spectrum allocation to individual enterprises. In this context, the operators highlight their expertise in handling large-scale network operations and stress that involving them remains the most efficient way to deploy 5G technology across various use cases.
Technology Companies’ Advocacy
Technology companies counter the telecom operators’ position by arguing that their opposition is driven by fears of losing revenue in the lucrative private 5G market. They emphasize that enterprises need control over their networks to ensure high service quality and security, which they believe cannot be effectively managed by telcos unfamiliar with specific business needs. This argument is particularly relevant for large enterprises managing sensitive and mission-critical operations, where the stakes for network performance and security are exceptionally high. In essence, these technology companies propose that having autonomous control over network deployment and operation is crucial for achieving the desired level of customization and reliability.
Major firms like Tata Communications and Capgemini underscore that large enterprises prefer autonomous network management. They advocate for direct spectrum allocation and a separate authorization framework to facilitate this autonomy. These companies propose administrative allocation of spectrum at nominal prices, arguing that enterprises’ usage will primarily be for internal operations, thus minimizing any adverse impact on the broader spectrum resources. By supporting this direct allocation model, technology firms believe they can offer tailor-fitted solutions that are responsive to the unique demands of different industries, thereby enabling more innovative and efficient 5G applications.
Enterprise Adoption and Challenges
Despite the availability of 5G in India for two years, enterprise adoption of private networks has been limited, mainly due to several factors that delayed the uptake. Among these factors is the lack of compelling use cases, particularly in the Internet of Things (IoT) domain, where 5G’s potential for high-speed, low-latency connectivity is often highlighted. Additionally, the satisfactory performance of existing 4G and Wi-Fi solutions for automation tasks has diminished the immediate necessity for enterprises to transition to private 5G networks. Many businesses find that the current infrastructure meets their operational needs adequately, reducing their urgency to invest in new technologies.
Enterprises have shown a preference for public networks due to cost considerations and the adequacy of existing infrastructure. Investing in private 5G networks requires substantial capital expenditure, making enterprises cautious about committing to such a transition without clear and significant benefits. This trend indicates that many businesses are adopting a wait-and-see approach, carefully weighing the potential advantages against the financial and operational implications. As a result, while the promise of private 5G networks remains alluring, practical considerations have so far limited their widespread adoption, pointing to a need for more demonstrable benefits and viable business cases.
Regulatory and Policy Dynamics
Trai’s recommendation aims to create a legal and regulatory framework that empowers enterprises to establish and operate private 5G networks. This shift could potentially reshape the regulatory landscape, facilitating a more dynamic and flexible deployment environment for 5G technology. However, it is essential to note that the Department of Telecommunications (DoT) has historically been against reserving a portion of the 5G spectrum exclusively for private networks. This long-standing stance reflects concerns about managing spectrum resources efficiently and ensuring equitable access across different segments of the industry.
In May 2023, the DoT allowed enterprises three deployment options: leasing a network slice from telcos, obtaining all network services from telcos, or leasing spectrum directly from telecom operators. Despite these provisions, significant interest from companies like Infosys and Tata Communications has not translated into actionable progress in direct spectrum allocation. Applications submitted in 2022 by several prominent companies seeking direct spectrum allocation have yet to advance, illustrating the regulatory challenges and complexities involved in shifting from the traditional model. This sluggish progress underscores the cautious approach adopted by regulatory bodies towards altering the established framework.
Perspectives from Industry Bodies
The Cellular Operators Association of India (COAI) and its director-general, SP Kochhar, strongly oppose the idea of dedicating spectrum for private networks, citing inefficiency and potential fragmentation of national resources. They advocate for maintaining the current spectrum allocation framework, emphasizing that the existing regulations sufficiently balance the interests of different stakeholders. Their stance is grounded in the belief that allowing private enterprises direct access to spectrum could disrupt the harmony of the national spectrum management plan, potentially leading to a fragmented and less efficient use of this valuable resource.
In contrast, technology advocacy groups like the Broadband India Forum and the Voice of Indian Communication Technology Enterprises (VoICE) argue for independence in network deployment. They emphasize the need for high security and service quality standards, proposing administrative allocation to minimize costs and facilitate smoother deployment of private 5G networks. These advocacy groups highlight that autonomous network management could lead to innovative solutions and greater efficiencies, particularly in sectors that demand highly customized communication infrastructure. By pushing for this model, they aim to unlock 5G’s full potential, catering specifically to the unique needs of various enterprises and industries.
The Evolving 5G Landscape
The resurgence of the dispute between telecom operators and enterprises over private 5G networks in India has introduced new perspectives. The Telecom Regulatory Authority of India (Trai) has proposed a significant policy change, suggesting that enterprises should be permitted to set up their own private 5G networks independently. This recommendation has reignited a debate among various stakeholders, posing essential questions about the future of 5G deployment in the country. The crux of the controversy revolves around whether enterprises should be granted the autonomy to establish their own private networks and how this potential shift could influence the larger telecom industry. The proposed change by Trai could lead to a significant transformation in the telecom landscape, with enterprises gaining the ability to tailor 5G networks specifically for their needs. However, telecom operators are concerned about the impact this could have on their traditional business models. As this debate unfolds, it remains to be seen how these developments will shape the future of connectivity and digital transformation in India.