Indian telcos rail against private 5G

India’s three big mobile operators are apparently attempting to block companies seeking to roll out private 5G networks from participating in the country’s upcoming spectrum auction.

Reliance Jio, Bharti Airtel, and Vodafone Idea have joined forces in a bid to persuade the authorities to prevent corporates, specifically non-telcos, from buying spectrum and setting up private 5G networks, according to unnamed sources cited by the Financial Express.

The operators are not exactly threatening to boycott the auction – that would clearly hit their own businesses too hard – but they are warning of lukewarm participation, the paper said, without disclosing exactly what that could mean. One way or another, they are clearly aiming to hit the government where it hurts: in the wallet.

The telcos’ argument is that allowing non-telecoms companies to hold spectrum and roll out private 5G networks for themselves, it will damage their own revenue prospects.

Well, yes. But there’s another word for that: competition.

Telcos the world over have a great opportunity to make some serious money out of the enterprise market with 5G, including through private networks. But they can’t – and shouldn’t – expect that market to be wholly reserved for them. They need to compete hard to win business there.

Last summer a report published by Omdia and commissioned by BSS firm Beyond by BearingPoint highlighted the fact that telecoms operators are failing to capture the 5G enterprise opportunity, being pushed out by alternative players and the enterprises themselves. That report was a follow-up to a similar study launched a year earlier which drew a very similar conclusion.

This is clearly an area telecoms operators need to tackle. But it would be nice to see them tackle it operationally – by offering enterprise customers the services and infrastructure they need on terms that make sense to both parties – rather than by trying to use spectrum auctions to blackmail their way out of trouble.

There is perhaps one mitigating factor for the Indian telcos.

They argue, as shared by the Financial Express, that it won’t make sense for them to invest in spectrum themselves if their major future revenue stream – the enterprise market – is hit by enterprises rolling out their own networks. While the enterprise market is a key future 5G revenue stream for all telcos, they don’t all face the extreme challenges in the consumer market that Indian operators do, in terms of high customer numbers over vast geographies and very low ARPUs.

The paper notes that Bharti Airtel has the greatest enterprise presence of all the Indian telcos, generating 20% of its revenues from that space. That’s not a huge percentage at present, but the growth potential is vast if others are prevented from entering the private networks market, it says.

Nonetheless, that doesn’t give the operators the right to seek to reserve the enterprise market for themselves…presuming the newspaper report is accurate, of course.

The paper states that if the Telecom Regulatory Authority of India (TRAI) allows private 5G networks, companies interested in having them may not need to participate in the spectrum auction, but rather could acquire the necessary frequencies at the price level set by the auction. That would, it says, create a level playing field.

But it’s not level enough for the telcos apparently, with one source bemoaning the regulatory constraints operators have to deal with in order to gain and use their spectrum that would be effectively sidestepped by corporate network builders.

The TRAI is reportedly just days away from submitting its 5G licensing recommendations to the government. It does not have the power to change the licensing framework to allow private 5G networks, but this level of fuss from the telcos suggests there could be something in those recommendations that might encourage the government to do so. There’s always some controversy ahead of an Indian spectrum auction and it’s pretty clear this one will be no different.

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