India's private 5G rules make few people happy

The Indian government has issued rules for the allocation of spectrum for private 5G networks, but all parties – with a few notable exceptions – have something to complain about.

The Department of Telecommunications (DoT) published guidelines for private 5G networks, both for telecoms companies looking to capitalise on that potentially lucrative market, and for the enterprises themselves. The DoT laid out four options for the deployment of private 5G, the first two being that licensed telcos can either use their own spectrum to set up private enterprise networks, or can use network slicing to create private networks from their public mobile infrastructure. Telcos may also lease their spectrum to enterprises, enabling the latter to set up their own networks.

However, key among the regulations is the decision to allow enterprises to obtain spectrum direct from the government without taking part in an auction or having to pay a licence fee, aside from an application charge of 50,000 rupees (US$635).

That’s bad news for the operators who have been lobbying against such a move for some time, insisting – rightly or wrongly – that it will damage their own 5G business cases and impact on profits.

It’s clear why they have taken that stance. The enterprise opportunity is a major part of the 5G business case for operators the world over, offering telcos the chance to generate a serious return on their spectrum and network investments. In India, where consumer mobile phone services are for the most part a volume game, the enterprise space is arguably even more important.

It’s understandable that India’s big three telcos would rail against the idea of paying out large sums for spectrum via auction, only to have other players pick up their own airwaves for virtually nothing. But it was unrealistic of them to expect to have sole control over the private 5G market through the spectrum allocation process; they are going to have to compete to win enterprise business.

You could be forgiven for thinking that those on the other side of the debate – the tech companies who want a piece of the action, essentially – would be cheering the DoT’s ruling, but that’s not altogether the case. Some of the guidelines are not proving popular, particularly those governing the size of company that can obtain spectrum and the timeframes involved.

The Broadband India Forum (BIF), which counts big names like Amazon, Google, Meta, Tata Consultancy Services and many more amongst its members and has been a frequent voice in the private 5G debate, is unhappy about the ruling that only companies with a net worth in excess of 1 billion rupees, or close to US$13 million, are permitted to apply for spectrum.

Indeed, India’s Economic Times quotes BIF president TV Ramachandran as saying he hopes the government will look again at that requirement, since it could hinder the mass-market spread of private networks.

There has been no formal comment from the BIF on the DoT guidelines as yet, but ahead of the announcement the organisation responded to media reports that suggested that initially enterprises will only be able to set up private networks in partnership with telecoms operators.

“BIF feels that such an action, if taken, will provide a regulatory advantage to one side, more so since that side is already overly strong and has the advantages of huge external market power of an incumbent network, which directly impacts the businesses of the weak non-telecom vertical players, i.e. enterprises,” it said.

That concern appears to have been borne out in the guidelines. While timeframes are not laid out in the DoT’s announcement, the Economic Times spoke to unnamed DoT officials who said the process for enterprises applying for spectrum directly from the government, including demand studies and recommendations from the Telecom Regulatory Authority of India (TRAI), could take one to two years. That means that in practice, companies keen to get going with private 5G have little choice but to work with the telcos.

All of which means that the operators have a window of opportunity to make their mark in the private 5G market…once next month’s spectrum auction is done and dusted, of course.

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