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    Rules for 5G spectrum allocation create pricing uncertainty, Tech cos tell DoT

    Synopsis

    BIF president’s letter questions ambiguity over spectrum charge and that govt hasn’t given a time frame yet. BIF counts tech companies such as Tata Consultancy Services, Cisco, Amazon, Google, Microsoft, Facebook owner Meta, Qualcomm and Intel among its key members.

    5G
    DoT's new rules on captive private network rollouts say that an enterprise seeking spectrum directly from the government for building captive private 5G networks would be given a renewable permit for 10 years against a non-refundable application charge of Rs 50,000.
    India's top tech companies have shot off a letter to the Department of Telecommunications (DoT) saying the new rules for captive private network rollouts and direct 5G spectrum allotments to enterprises have created fresh uncertainty around the final pricing of these airwaves.

    "There is uncertainty as regards the pricing of spectrum (as) it's unclear whether the spectrum would be without charge, or, if charged, what it would be, and when it would be announced," Broadband India Forum (BIF) president T V Ramachandran said in a strongly-worded letter, dated June 29, to telecom secretary K Rajaraman.

    BIF counts tech companies such as Tata Consultancy Services, Cisco, Amazon, Google, Microsoft, Facebook owner Meta, Qualcomm and Intel among its key members.

    DoT's new rules on captive private network rollouts say that an enterprise seeking spectrum directly from the government for building captive private 5G networks would be given a renewable permit for 10 years against a non-refundable application charge of Rs 50,000. The rules also state that enterprises won't need to pay any entry or licence fees.

    5G

    But BIF red flagged uncertainties around pricing of such spectrum for captive networks as the government has said direct spectrum allotments to enterprises will happen only after DoT concludes demand studies and obtains the sector regulator's views on this score, a process that could take a long time. Tech companies are unhappy as no definite timeframes have been given either for the DoT study or the regulator's recommendations on this matter.

    Ramachandran questioned DoT's rationale of "conducting a prior demand study" when an expert techno-economic authority like Trai is already involved in the exercise and has backed direct spectrum allotments to enterprises for captive 5G networks.

    telco

    Such a demand study by DoT, he said, is "rather inconceivable in case of captive/non-public/private networks since these would vary from entity to entity in the same category and, further, from category to category and, of course, from once industry vertical to another".

    In his letter to Rajaraman, the BIF president said that DoT, through its policy, has provided telecom service providers "a strong first-mover advantage (in the captive 5G networks game) by giving them spectrum first, well in advance of enterprises, (which) would be most unfair and unjust."

    If anything, industry experts say the new rules could escalate the battle between telcos and tech companies over control of 5G airwaves to be used for building captive private networks. Telcos fear access to 5G spectrum without auctions would allow tech players to offer similar 5G enterprise services at a much lower cost and undermine their 5G business case.

    Telcos, on their part, have deplored DoT's decision not to charge enterprises any licence or entry fees for direct spectrum allotments for captive 5G networks to connect their factories across the country.

    The BIF has also voiced misgivings about the minimum Rs 100 crore net-worth criteria for enterprises to qualify for direct spectrum allotments for captive 5G networks. "The eligibility criterion of Rs 100 crore for getting a captive non-public network (CNPN) licence appears rather unnecessarily high as it can be a deterrent for young and promising startups and reputed research institutions," said Ramachandran.


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