Will private 5G networks take off, finally? Fresh demand study soon
Despite three years of 5G, captive networks haven't taken off. One reason is the lack of directly allocated spectrum. Now, the government is weighing a change.
Captive 5G networks that failed to take off despite three years of 5G may get a leg-up with the Centre weighing the case for allocating spectrum directly to enterprises, a demand that faced resistance from telcos before.
The government will soon assess the demand for such dedicated networks, two people familiar with the plan said, promising seamless automation and operational efficiency at sprawling factory premises and corporate campuses. Once the demand studies are done, the government will decide how to allot spectrum to such companies, whether through auctions by direct allotments.
“Enterprises have expressed concerns that telecom operators are charging them higher prices to set up their private networks. Also, they have said that there are also security concerns if they give contracts to telcos," one of the two people said on the condition of anonymity.
Idea reborn
The government has toyed with the idea before: In 2022, 20 companies including Infosys, Capgemini, GMR, Larsen & Toubro, Tata Communications, Tata Power and Tejas Networks had moved the Department of Telecommunications (DoT) for spectrum, primarily in the 3,300-3,670 MHz band; however, the DoT did not act on these requests at the time.
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"The government is evaluating which spectrum band can be allocated, and what will be the mode of spectrum allocation - auction or non-auction. In the case of a non-auction route, Schedule 1 of the Telecom Act would need to be amended," the second person said on the condition of anonymity. Schedule 1 of the Act outlines specific purposes for which the government can assign spectrum without an auction.
Private networks that operate in a closed environment could benefit a diverse set of industries such as automotive, manufacturing, coal & mines, ports, and fast-moving consumer goods.
“The potential of private 5G, or captive non-public networks (CNPN), in India is still emerging due to regulatory considerations, spectrum access arrangements, and cost factors," said Sandeep Arora, industry platform leader for telecom, India at Capgemini.
“A direct spectrum allotment to enterprises could catalyze the adoption of private 5G in India," he said, adding that the model is gaining traction across Europe and parts of Asia-Pacific.
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Queries emailed to the Cellular Operators Association of India (COAI), Infosys, Tata Communications, GMR, L&T, and DoT on Monday remained unanswered.
Opposition
Telecom operators have earlier opposed direct spectrum allocation to enterprises, claiming it would create an uneven playing field and allow technology firms an indirect entry into providing 5G services to businesses. In fact, COAI had said that telcos are fully equipped to meet enterprise demand for 5G applications through spectrum leasing and network slicing.
“It is almost a ₹10,000 crore market," said Rakesh Bhatnagar, director general of Voice of Indian Communication Technology Enterprises (VoICE), which represents companies like Tejas Networks, VVDN and HFCL. "There are a lot of areas - steel plants, ports, refineries, etc, where there is no reliable communication facility and there is a requirement of private 5G, Bhatnagar said, urging direct spectrum allotment which will not only reduce the dependence on licensed operators but also significantly reduce costs. “We already have over 10 domestic design-led players capable of deploying private 5G networks," he said.
Three years since the debut of 5G in the country, enterprise adoption of private networks has been slow. Among the reasons: Higher costs, security concerns, and the absence of compelling use cases such as internet of things (IoT). Additionally, many enterprises have found that 4G networks and Wi-Fi solutions are sufficient for their automation and connectivity needs.
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Capgemini’s Arora echoed Bhatnagar’s views. “Depending on the spectrum band and deployment scale, enterprises could see savings in the low to mid double-digit range. This shift would democratize access to private 5G, making it viable not just for large conglomerates but also for mid-sized businesses eager to embrace digital transformation."
‘No harm’
“There is no harm in giving the option of direct spectrum allotment to the enterprises. It seems that enterprises do not want to depend on telcos for implementing critical operations like automated factories, robotics, etc, where there cannot be any lag on service quality and connectivity," said Satya N. Gupta, former principal advisor at Trai. He added that cost is expected to be high for these enterprises if an auction method is decided, but spectrum assignment through non-auction route can be cost-effective. According to Gupta, the 6 GHz band, which will be opened up for licence-exempt use by the government, could also be used for captive 5G networks.
On direct spectrum allotment, industry executives said the most suitable bands would be those already earmarked for 5G use - the mid-band and millimeter wave band, which balance coverage and capacity.
However, the move could hurt telcos which wanted to monetize their spectrum by setting up private networks for companies, an industry executive said on the condition of anonymity.
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According to a report by the Global Mobile Suppliers Association (GSA) in February, India has only 10 private networks compared to 325 in the US, 101 in Germany, 65 in the UK, 55 in China, and 43 in Japan. The association counts companies such as Apple, Intel, Ericsson, Nokia, and Qualcomm as its members. “There are 80 countries around the world with at least one private mobile network. We note a strong, positive correlation between the number of private mobile network references and countries with dedicated spectrum," GSA said in the report.
Private networks
Some private 5G projects announced in India include Airtel 5G network project at Bosch facility for high-speed connectivity and automated manufacturing; and Airtel-Tech Mahindra partnership to deploy captive private network at Mahindra’s Chakan facility. Recently, state-run BSNL tied up with a homegrown startup Tidal Wave to deploy private 5G networks at different Coal India facilities, which includes connectivity for critical communication, vehicle tracking system and fuel management sensors.
In 2022, when the Telecom Regulatory Authority of India (Trai) shared its recommendations on 5G spectrum auction, it had recommended four options for captive networks; one, allowing enterprises to use a network slice from telcos; two, take the services of private networks completely from telcos; three, give enterprises the option of taking spectrum on lease from telcos; and four, direct spectrum allotment to companies.
In May 2023, DoT chose to go ahead with the first three, skipping the last. In its latest recommendations to the DoT on 17 February, Trai has proposed introducing a CNPN provider authorization under Section 3(1)(b) of the Telecommunications Act, 2023. This would grant enterprises the right to establish, operate, and expand private 5G networks without relying on telecom operators.
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During the 5G auction spectrum consultations in 2022, FMCG-major ITC had asked for reserving dedicated spectrum for the enterprises to deploy a private network in order to fulfil affordability, reliability, continuity, flexibility, and security requirements of the business.
“ITC should be allowed to build the private cellular network with their in-house capabilities for Industry 4.0 initiative to harness the full benefits of Industry 4.0 to the economy in a time-bound manner. Spectrum for private 5G networks to the industry should be allocated directly by the spectrum managing agency (government-backed entity) in various geographies on an administrative basis at a nominal fee," the company had told Trai.
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