Captive 5G play: BIF refutes claims on backdoor entry of tech companies

Industry body Broadband India Forum (BIF) on Friday said suggestions that captive networks should bid for spectrum in auctions is "extremely irrational".

BIF refuted the "misinformation" being propagated to demand a level playing field between two completely different sets of services, public and private networks.

The comments came a day after telcos' body COAI - which represents Reliance Jio, Bharti Airtel, and Vodafone Idea - claimed that administrative allocation of spectrum for private 5G networks will be against tenets of fairness.

The Celluar Operators' Association of India (COAI) had lauded use of open bidding and transparent auction route by companies seeking 5G airwaves.

 

COAI had alleged that administrative allocation of spectrum for captive 5G networks is against principles of level playing field and effectively provides a "backdoor entry" to big technology players to provide 5G services and solutions to enterprises in India without equivalent regulatory compliance and payment of levies that telcos are subject to.

Industry body BIF countered this saying such an argument if flawed and misleading.

"It is however, apparent that certain quarters and incumbents with vested interests are attempting to derail this progressive development through irrational, misleading and misinformed claims for a level playing field between the vastly different service domains of public networks and captive non-public networks," BIF said.

BIF added that it is highly irreverent to imply that the Cabinet decision permitting allocation of direct spectrum to private enterprises offers a backdoor entry for them to get 5G spectrum and set up public/consumer 5G networks.

It argued that the suggestion that captive private networks should bid for spectrum in auctions is extremely irrational, given that their objective is to enhance efficiencies and not use the spectrum to provide commercial public services.

All the four methods approved by the Cabinet and issued in the Notice Inviting Applications (or the bid document) for obtaining spectrum for captive private 5G non-public networks (CNPN), have the involvement of telcos, it argued.

Even the fourth option of direct assignment of spectrum to the enterprises does not preclude the option that enterprises buying the spectrum directly from the government can have the captive network built by telcos for them.

BIF contended that this, in fact, gives telcos undue advantage over the private enterprises.

"So, in actuality, this is a case of non-level playing field in telcos' favour. Effectively, telcos have a share of each piece of the overall pie and in no way, such a move inhibits their business plans as being incorrectly stated," BIF said in a statement.

On the contrary, it added, there is merit in calling out a need for a level playing field between the enterprises and telcos as it is the former who are getting short-changed as a result.

"It is also surprising to note such claims being raised post submission of the applications for taking part in the auctions, which implies acceptance of the terms of the NIA - including the option of direct allocation of spectrum for CNPNs," BIF said.

The captive 5G network play has been a flashpoint between telecom service providers (TSPs) and tech companies.

The lucrative enterprise 5G is considered a major money-spinner for players, and the decision on allowing independent entities to set up private captive networks, has dealt a severe blow to telcos.

Telcos contend that if independent entities are allowed to set up private captive networks with direct 5G spectrum allotment by the telecom department, their own business case will get severely degraded.

BIF highlighted that it is critical to understand that there is a fundamental and elementary difference between private 5G networks and the consumer or public networks of telcos.

It elaborated by saying that while the consumer/public networks are essentially connected to the public internet and the public telecom networks, the closed user captive networks are not.

"Moreover, whereas public 5G networks are meant to be used by millions and billions of consumers, private 5G networks are exclusively meant for use by the enterprises within their limited defined geographic areas. Technically there is only one user of the given spectrum for the private network within those boundaries and that is the enterprise itself," BIF said.

It concluded that there is no reason for the enterprise to buy the spectrum through auctions, which are meant for use by a number of telcos for commercially offering services to the large public base.

Citing an example, it said a small enterprise in a town in Gujarat would neither be able to bid for spectrum in league with the telco giants, nor would it have any use for the big chunk of spectrum, even if it hypothetically won via auction.

"This entire logic is flawed and misleading, attempting to hinder the right of an enterprise to choose a more competent and suited service provider for their captive private network, and rather forcing them to accept whatever is being offered by TSPs, whether it is satisfactory to them or not," said BIF whose members include tech companies like Google, Amazon, Meta, Tata Consultancy Services (TCS), among others.