Private Networks Give Big Tech Back-Door Entry in 5G Business: Telcos’ Body

The government’s decision to allocate spectrum directly to enterprises for their captive usage will provide back-door entry to big technology firms, telecom operators’ body COAI said on Thursday.
The Cellular Operators Association of India (COAI), which represents Reliance Jio, Bharti Airtel, Vodafone Idea etc, said that the big technology companies will take a single-lease licence and start serving enterprise customers at par with public networks like Telecom Service Providers (TSP) without facing similar set of rules.

COAI gave reference of Amazon, Google, Cisco, Intel, Microsoft, Apple etc – known as big technology companies – and claims in different article that they are capable of setting up and managing such networks for providing 5G services over the cloud to enterprises, effectively competing directly with telecom operators in the enterprise connectivity space.

The Department of Telecom (DoT) issued guidelines on June 26 reiterating direct allocation of spectrum to Captive Non-Public Network (CNPN) which will be meant for internal use of the organisation without any connectivity with public networks to check them from providing direct public services.

COAI in a letter dated June 30 written to the telecom secretary K Rajaraman said that its members are disappointed and disheartened by the provision of CNPN.

“…administrative allocation of spectrum for such networks is fundamentally against principles of level-playing field and effectively provides a back-door entry to big technology players to provide 5G services and solutions to enterprises in India without equivalent regulatory compliance and payment of levies that TSPs are subjected to,” COAI said.

It said that the guidelines allows technology companies to become de-facto service providers and compete with TSPs in the enterprise connectivity space.

“DoT’s decision to allow private networks at different locations under one licence makes it much easier for such entities to create an equivalent pan-India or state-wide network with just one licence and by taking leased lines connectivity to connect multiple locations. These networks spread across locations and interconnected over leased lines do not qualify to be called as captive non-public networks as these are in no way less than public networks,” COAI said.

According to analysts, allocation of spectrum directly to enterprises is one of the reasons that upcoming 5G auctions may see low bidding by the telecom operators. The three private telecom operators – Reliance Jio, Bharti Airtel, and Vodafone Idea – are expected to buy spectrum worth Rs. 71,000 crore only in the upcoming auction, leaving a vast majority of the radiowaves going under the hammer unsold, according to research firm IIFL Securities.

The government will begin an auction of about Rs. 4.3 lakh crore worth of airwaves capable of offering fifth-generation or 5G telecom services, including ultra-high-speed internet from July 26.

The research firm further said if all telecom operators avail the option of equal annual installments over 20 years, the government would receive Rs. 6,200 crore proceeds in the current financial year.

“We urge the government to kindly relook into the concept of CNPN and ensure licensing and regulatory level-playing field between telecom operators and enterprises/ tech companies while safeguarding interests of national security, and revenue to exchequer,”