India may opt for private network 5G spectrum leasing by telcos

The Indian government is unlikely to allocate spectrum directly to enterprises to build 5G private networks, according to recent media reports.

This contradicts recommendations made by the Telecom Regulatory Authority of India (TRAI) last year. TRAI was in favor of leasing spectrum from both telcos and the Department of Telecommunications (DoT) for deploying 5G private networks.

TRAI had recommended reserving a 40MHz spectrum block in the 3,700-3,800MHz band and 400MHz in the 2,850MHz-2,950MHz millimeter wave band for private networks. However, DoT rejected these recommendations and consulted the country's attorney general, R Venkatramani, who advised using auctions to ensure fair spectrum disbursal. It is as yet unclear if any 5G spectrum for private networks will be auctioned. Media reports suggest that leasing from telcos might be the only way for enterprises to build captive networks.

As part of a demand study conducted by DoT, enterprises including Infosys, Capgemini, Tata Communications, Tejas Networks (part of Tata Group), Tata Power, Larsen and Toubro and GMR had shown interest in procuring 5G spectrum directly from the authorities to set up private networks.

If it is implemented, DoT's decision will favor telcos, which have been lobbying for this for several years. They argue that private networks are among the most important 5G use cases, and that they won't have any incentives to build 5G networks if enterprises can procure 5G spectrum directly from the DoT to build them.

Possible blow to domestic tech players

On the other hand, businesses point out that allocating spectrum directly to enterprises will promote the local telecom gear industry. Telcos tend to work with established global telecom equipment manufacturers rather than the domestic industry.

"Earmarking small chunks of bands for the deployment of private 5G networks based on domestic technologies as an example can create an exclusive space for domestic players to nurture," says Voice of Indian Communication Technology Enterprise (VoICE) in response to TRAI's consultation paper on promoting networking and telecom equipment manufacturing in India. VoICE was formed with the aim to support self-reliance in the telecom industry and counts several domestic companies including STL, C-DoT, Tata Consultancy Services and Niral Networks among its members.

Enterprises also point out that direct allocation of the spectrum might be the best way forward since telcos can demand a higher rate for the spectrum for 5G private networks by effectively forming a cartel. ITC mentions this in response to the TRAI consultation paper on auction of spectrum in frequency bands identified for IMT/5G.

Despite uncertainty regarding the disbursal of spectrum for 5G private networks, several companies have already started deploying them. For instance, Apollo Hospitals has collaborated with Airtel to set up a private network. Further, Airtel, in collaboration with Tech Mahindra, has deployed private 5G networks at Mahindra & Mahindra's auto manufacturing plant in Maharashtra. Vodafone Idea is also working with L&T Smart World and Communication (SWC) to set up a 5G private network.

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— Gagandeep Kaur, Contributing Editor, special to Light Reading