Telecom service providers and some supporters of private captive networks are in a war of words over 5G spectrum. Barely emerging from the ravages of the tariff war following Reliance Jio’s market entry, the former wanted to repair the balance sheet and amass big money for 5G airwaves at next month’s auction, but a policy change that would allow corporations to Will let you run your own network. India has balked at them – and the return on capital should worry enterprises whose use of 5G services they were relying on became self-sufficient. On the other hand, advocates of captive spectrum argue that there is no reason to allow telecom operators to hand over whatever is available for commercial use; If state-run organizations have their share for internal use, why are private firms unwilling to pay for security and reliability? However, what such allottees will have to pay is the focus of this. If they get a direct allocation, telcos fear, it could be at rates so cheap that there could be an uneven cost base that will hurt their ability to compete for enterprise customers. They are right on this. The country needs a level playing field, as demanded by the office bearers. However, achieving this may not be easy.
As stated by the Cellular Operators Association of India (COAI), telcos want the same rules to be followed on captive networks as well. These are so difficult that they can only assume companies whose main business is telecommunications would find it tolerable, but their advocacy of the preconditions would suggest a serious acceptance of the idea. As a licensed category, telcos are already vulnerable to weak competition, and they cannot expect to remain the gatekeepers of every advancement in the sector that is critical to the future of Digital India. In addition, we have businesses eager to network our own. That includes more than half of all Indian enterprises in the sectors of manufacturing, transportation, logistics, healthcare, energy, utilities and broadcasting, according to research firm Omdia. The proposal is still in the raw stage. The Center has said that it will study the enterprise’s demand for airwaves and consult the regulator before taking a decision on regulating these networks. If it’s too cumbersome, only megacorps will go for it, while lighter rules will be unfair to the incumbents, until their burden is also less. Of course, the latter will have the opportunity for additional revenue in setting up and managing captive networks for corporate clients. Some technical players argue that since these will be isolated, there will be no need to monitor them so strictly for national security. Still, in order to maximize value – as is the case with fleet operators – some users may wish to engage with open networks, which would end their isolation and put them at risk. Therefore, the rules on interoperability need to be clear from the start.
There is likely to be a major battle over captive spectrum pricing. Clear optimists like TCS have conceded that it makes business sense if it is allotted directly, while COAI insists that airwave seekers should win the auction of the same, as telecom players do. Of high relevance here would be how we interpret the Supreme Court’s directions on the 2G spectrum case, in which auction was prescribed as a fair practice (to prevent low-priced allotments). If the idea of a captive network of the private sector is not to get bogged down in litigation, the Center should keep that in mind. Since free-range bidding can have difficult results, it should also set a minimum price for those bids that are acceptable to all.