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Contents
Synopsis: Should India enable the private 5G networks? A brief look at the issues involved.
Introduction
Private 5G networks, where the infrastructure is used exclusively by devices authorized by the end-use organization, such as those within factory premises, are becoming a growing business in the global telecom landscape.
Last year, Germany issued 5G private licences to over 33 companies to run exclusive networks.
In France, airport operator ADP Group and French electricity company EDF have joined the same bandwagon.
And the UK, the US and Australia are putting in place policies to enable private 5G networks.
So can India, which is expected to roll out 5G sometime next year, be far behind?
What is the present situation in India?
A battle has already begun over government policy to permit such networks.
Telcos want 5G private networks to operate on the same terms as they do. This means operators of 5G private networks should buy spectrum through auctions and pay for licences.
Technology players, on the other hand, want spectrum to be offered at an administrative price, as Germany has done.
Should govt auction spectrum for private 5G networks?
Let’s have both sides of the argument:
No. Spectrum should not be auctioned:-
– A private network with limited coverage is of interest only to that enterprise.
– Spectrum required is also small, between 50 and 100 MHz, and it is a closed user group not connected to any external public network with no commercial communication services involved. So there is no reason to auction spectrum, administrative allocation is the way.
– Moreover, a lack of interconnection with external public networks precludes the need for a licensing regime similar to that of commercial telecom service providers.
– A light-touch licensing regime would work just as well.
Yes. Govt should auction the spectrum:-
Telecom companies vehemently oppose any suggestion that spectrum should not be auctioned.
– One reason is that they want a level playing field. If they pay for spectrum for 5G, how can private networks get it free?
– Two, private networks should also get a universal access service licence to operate the same services just like they do and pay the same price.
Why there’s a difference of opinion?
Telcos: Currently, enterprise accounts for less than 10% of telco revenues. This is expected to go up to over 40% with the advent of 5G since the use of 5G increases in factories and other premises.
Tech players, like Fb, Google, Microsoft etc., on the other hand, will have an expanded market; they can offer network as well as end-to-end enterprise solutions to corporate customers directly. Currently, they have to tie up with operators to serve their customers.
Hence, everyone wants a share in the 5G enterprise services sector, which will be far bigger than 4G.
Should India enable private 5G networks?
Arguments in favor:
It would be detrimental for enterprises to wait for the roll-out of large public networks of 5G, with early roll-outs expected only in 2023 and that too in a few cities. The process has already been delayed by two or three years. But that should not mean that Indian enterprises should lose valuable time modernising their operations. Hence, private 5G networks should be permitted to be deployed immediately to garner wide benefits and kick-start manufacturing and industry 4.0.
Arguments against:
Lack of expertise: Many small and medium-sized enterprises lack the expertise or resources for their own network deployment.
Security issues: Also, in many countries, unlicensed spectrum earmarked for private networks is raising serious security issues.
Cost: Telcos say the new technology enables them to provide a company an equally robust and secure private network at a lower cost. Obtaining these services from telcos and focusing on their core business is much more cost-effective for companies.
Source: This post is based on the article “Private 5G networks: The next battle call” published in Business Standard on 18th Sep 2021.
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