Telcos oppose reserving 5G spectrum for captive use; L&T, Tata Communications for it

Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) have told the telecom regulator not to set aside any 5G spectrum for private enterprise networks for captive use either for free or at an administrative price. They said any such proposal would be legally untenable, disrupt growth of the telecom sector and also cause huge revenue losses to the national exchequer.
Tata Communications (TCL) and engineering major Larsen & Toubro (L&T), though, have strongly countered the telcos’ position, saying dedicated spectrum must be reserved for private networks and urged the Telecom Regulatory Authority of India (Trai) to adopt global practices to create a private 5G ecosystem for enterprises to drive the government’s Make in India vision.

In its 5G discussion paper, Trai had sought industry views on whether some 5G spectrum must be set aside for private enterprise networks (for automotives and other industrial uses), and how to price such airwaves.

In its counter-submission to Trai, Mukesh Ambani-led Jio, said “there is no valid justification in providing auctioned spectrum for free or at an administrative price to certain enterprises for availing captive licensed services”. Such a move, it said, would be travesty of the Supreme Court judgment. More so, since the proposed captive networks would “essentially be commercial networks and would be used to enhance the profitability of these industries,” Jio added.

The telecom market leader said any assignment of spectrum must only be via auctions in line with the apex court’s 2012 verdict that had backed airwave allocations through auctions alone.

Like Jio, Sunil Mittal-led Airtel too does not see any justification in how commercial enterprises can lay claim to 5G grade spectrum for captive use. “If any entity has to access spectrum from any of the IMT (read: 5G) bands, it should obtain a unified licence, and get access rights to such IMT spectrum,” Airtel said in its submission.

It added that any direct spectrum allocation to industry verticals for captive private networks “can be in unlicensed bands instead of giving away 5G spectrum since coverage is not an issue for such enterprise users”.

Tata Communications (TCL), though, has built a strong case for enterprises to freely decide on their captive private 5G networks based on their requirements of industry 4.0 platform/apps, and establish them within their factory premises.

This, it said, is since inherent features of private 5G networks—like enhanced bandwidth, unobstructed connectivity and improved security—offer complete operational control to enterprises, better privacy protection and a security advantage over a public network.

In its discussion paper, Trai had said the likes of Germany, Finland, the UK, Brazil, Australia, Hong Kong and Japan had set aside spectrum in the mmWave band for private captive 5G networks, while Slovenia, Sweden and Korea planned to set aside both mmWave and mid-band 5G spectrum for such captive networks.

L&T said private 5G deployments were transforming the kind of business value being unlocked across various industries by the enterprises worldwide, and this was due to their ability to apply their deep industry knowledge on their private networks and bring cutting-edge solutions to life.

While TCL feels it would be difficult for a telco to customise its network for enterprises, Vi said operators were capable of meeting all customisation needs at competitive rates amid increased focus on M2M and industrial 4.0 services.

Jio too said telcos were serving captive networks for years and enterprise business contributed substantial revenues to TSPs, which is factored in at the time of valuation of spectrum and bidding in auctions. “Any regime that alienates this revenue would adversely affect a TSP’s viability and should be avoided at all cost.”

In an initial submission, India’s top cigarette maker ITC too had urged Trai to back direct allocation of spectrum for private 5G networks by the spectrum managing agency (read: a government-backed entity) in various geographies on an administrative basis at a nominal fee.