Telcos continue to oppose direct spectrum allocation for private networks

Telecom operators Reliance Jio, Bharti Airtel, and Vodafone Idea have renewed their opposition to the department of telecommunications’ (DoT) latest move to reassess demand for direct spectrum allocation.

The Cellular Operators Association of India (COAI), which represents private telecom service providers, maintains that allowing enterprises to directly obtain spectrum for private 5G networks is neither viable nor secure within the Indian context.

According to the association, such a move could undermine national revenue, disrupt the security framework, and create an uneven playing field for licensed operators.

Private 5G network

A captive non-public network is designed exclusively for an enterprise’s internal use. Unlike public networks, these networks operate in a closed environment, providing dedicated connectivity to industries such as manufacturing, healthcare, automotive, and packaged consumer goods.

The DoT conducted a survey from 1 July to 31 July to assess the demand for direct spectrum assignment for private networks.

The opposition assumes significance as the proposal, if approved, could allow large firms to bypass telecom service providers for high-speed, automated connectivity within their campuses and factories.

“The department is yet to analyse the data. It will be done after the satellite spectrum norms are finalized,” a government official said, on the condition of anonymity.

While industry groups such as the Broadband India Forum (BIF), which represents tech companies, have cited examples of countries such as the US, Germany, and Finland that support private networks, telecom operators argue that the comparison is misleading.

“This comparison ignores a crucial contextual difference of such industries being located in remote or geographically secluded areas with limited public network coverage. In India, however, most industrial corridors and enterprise zones are already well-served by telecom operators, thereby leaving no coverage deficit,” said S.P. Kochhar, director general of the COAI, in a statement on Monday.

Some industry groups and enterprises have also expressed concerns that telecom operators are charging them higher prices to set up their private networks, and there are also security concerns if they give contracts to telcos.

According to Kochhar, it is misleading to state that setting up private networks independently would be cheaper for enterprises. In reality, deploying a private 5G network entails significant capital expenditure on equipment, spectrum management, security, network maintenance, and skilled personnel. Unlike telecom operators, most enterprises do not have the expertise or scale to manage telecom infrastructure efficiently, he said.

Telcos vs tech companies

Even as telecom operators have been opposing the direct spectrum allotment for enterprises, companies such as Tata Communications have renewed their push to get the airwaves for private 5G networks.

“Our representation is that for private 5G, the rules need to be different…we cannot have the same rule of spectrum roll-out obligation,” Amur Lakshminarayanan, the company’s managing director and chief executive, told Mint in a recent interaction.

Unlike telecom operators, which serve the broader public with 5G, private networks are targeted to a customer site, and companies cannot have spectrum roll-out obligations similar to those of telecom operators, he said.

Lakshminarayanan, however, said the private 5G demand is slow worldwide as currently enterprises have not reached a stage to realize the full potential of industrial internet of things (IoT).

Another key concern flagged by telecom operators is spectrum interference. The COAI warned that unlicensed private networks could cause signal spillover, disrupting public mobile networks and degrading service quality.

It further emphasized that private networks managed outside the regulatory purview pose national security risks due to the lack of compliance obligations, such as lawful interception and emergency coordination.

The industry body also highlighted the potential loss to the exchequer if direct spectrum allocation bypasses auctions, which generated ₹1.5 trillion in 2022 alone.

The operators said enterprise 5G requirements should be met through licensed telecom service providers under proper regulatory oversight, ensuring both security and accountability in India’s digital future.

The DoT’s demand study was also to identify the prospective frequency bands for the direct assignment of spectrum for private network-based services.

Enterprises with a net worth of more than ₹100 crore, willing to set up private networks by obtaining spectrum directly from DoT, could participate in the demand study. Further, system integrators interested in establishing private networks for such enterprises could also participate, according to DoT.

Lately, local players have also flagged challenges with the spectrum application process to the DoT and expressed concerns over the ₹100 crore eligibility condition.

The volume and depth of information being requested during the demand assessment stage— without a clear linkage to the final licensing or allocation criteria—are becoming excessively burdensome, especially for enterprises and research-driven organizations that are still evaluating the technical and business models for private network deployment, said Rakesh Bhatnagar, director general of Voice of Indian Communication Technology Enterprises (VoICE), which represents companies such as Tejas Networks, VVDN Technologies, and HFCL, among other local players.