Who will benefit from India’s private network rules?

Who will benefit from India’s private network rules?

India’s Department of Telecommunications (DoT) has laid out the rules for building captive non-public networks (CNPNs) – or private 5G networks.

Enterprises seeking spectrum directly from the DoT are to be given a renewable licence for 10 years against a non-refundable application charge of Rs 50,000 (about US$633). Such companies won’t need to pay any entry or licence fee.

To apply for spectrum any private group involved needs to have a minimum net worth of Rs100 crore (about US$12.65 million), be registered under the Companies Act and, says the DoT, be an “occupant of the geographical area/property on which it intends to establish the CNPN”. 

The DoT will then undertake demand studies, and seek recommendations from the Telecom Regulatory Authority of India (TRAI) for direct assignment of spectrum to such enterprises. DoT officials have said this process could take one to two years.

India’s Economic Times adds that, according to the DoT’s guidelines, an enterprise can establish an ‘indoor/within premise’ isolated CNPN for its own use. The CNPN licence cannot be used for commercial telecommunications or connect the captive user’s network to public networks in any manner.

Another, possibly quicker, approach could be for enterprises that want to set up a private 5G network to obtain spectrum on lease from operators – or get the operators to set up the networks for them.

That would no doubt suit operators, though there are strict rules requiring, among other things, a detailed summary of the spectrum band, the amount of spectrum, the period of lease, the geographic area, and the use of the spectrum, all of which have to be input on the Saral Sanchar Portal within 15 days of entering the agreement.

Saral (Simplified Application For Registration and Licenses) Sanchar, a web-based portal for issuing of various types of licenses and registration certificates, is part of various digital initiatives being taken by the DoT.

There may be something to appeal to everyone here but it’s equally possible there could be something to annoy everyone. Already TV Ramachandran, President of the Broadband India Forum (BIF), has complained that the high net worth criterion would bar smaller companies.

Not surprisingly, he likes DoT’s decision not to charge independent enterprises any licence or entry fees for setting up captive 5G networks. Operators seem less pleased about the relatively cheap allocation of 5G spectrum to enterprises given that they are soon likely to be spending billions of dollars on spectrum.

TeleGeography's CommsUpdate points out that, while the DoT claims that easier access to self-run private networks will support the development of new use cases for 5G in a number of industries, it could also undermine the hope of many operators that they will be able to supply a revenue-generating service.

Of course, this doesn’t stop operators from offering a service, especially given the length of the process if enterprises decide to go it alone. Nevertheless, there has been speculation that the DoT’s approach to licensing for CNPNs could negatively impact bidding in the upcoming 5G spectrum auction.

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