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    HomeBusinessCOAI writes to Telecom Minister to address private captive networks

    COAI writes to Telecom Minister to address private captive networks

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    Info-tech

    Says there will be no business case for roll-out of 5G networks if DoT gives away spectrum to private players

    Cellular Operators’ Association of India (COAI) in letter to Telecom Minister Ashwini Vaishnaw has requested to address the critical issue of private captive networks, saying there will be no business case for roll-out of 5G networks, in such a scenario.

    The development comes even before the Cabinet has to approve and decide on the 5G auction dates. The COAI represents telecom service providers (TSPs) such as Bharti Airtel, Reliance Jio and Vodafone-Idea.

    Private enterprises have asserted that giving spectrum directly for creation of captive networks, without any dependency on TSPs, would accelerate the digital agenda, a stance that telecom operators have vehemently opposed.

    “Giving away dedicated spectrum for private captive networks will render the roll-out of 5G services by the TSPs needless because of lack of business case. This will diminish the revenue so much that there will be no viable business case left for the TSPs and there will not remain any need for 5G networks roll-out by TSPs,” it said in the letter.

    The industry body informed that its members, during their interactions with their corporate clients, who are also serviced by other entities, have learnt that these entities are promising the corporates that they would be able to meet their growing technological needs by setting up private 5G captive networks of their own by direct allotment of spectrum by Department of Telecommunications (DoT).

    It argued that worldwide it has been seen statistically that wherever 5G has been rolled out, there is hardly any consequent revenue increment from the retail segment. The revenue and efficiency enhancement can happen only from the enterprise segment, it said. 

    “The new segment that would be benefited by 5G services of the TSPs is the enterprise segment including manufacturing, logistics, education, hospitals, campuses and factories. Our TSP members have also conducted successful 5G trials for many of the use cases in the last one year. With 5G auction, the TSPs are targeting the enterprise segment for revenue enhancement and overall increase in productivity and efficiency. This is where TSPs 5G business case lies,” SP Kochhar, Director General, COAI wrote in the letter. 

    The letter further said that the needs of voice and data of the entire nation is being adequately met by the TSPs through their 4G networks, and as such the revenues of TSPs are not going to increase from the retail segment despite very heavy capital investments for 5G rollout. This is further accentuated because India is a highly price sensitive market. 

    “If private captive networks for enterprises are set up independently by other entities then this would mean dramatically altering the industry dynamics and hurting the financial health of the industry and will strike at the very heart of the business case enumerated above,” the COAI said. 

    In view of this , COAI requested urgent intervention of the government in the matter so as to ensure that the interest of the TSPs.

    Published on June 09, 2022

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