ITC asks Trai to reserve spectrum for enterprises at a 'nominal cost'

ITC has asked the telecom regulator to reserve spectrum for enterprises such as itself at a ‘nominal cost’, so that they can control and deploy their own dedicated private cellular networks based on their ‘in-house capabilities’.  

The company has also opposed any move to allow telecom operators to lease spectrum to corporate houses for running their private networks. Instead, it has demanded that companies should be allocated spectrum directly by the spectrum managing agency (a government-backed entity) on an ‘administrative basis at a nominal fee’ in various geographies. ITC says that such a private network will fulfil the business objectives of affordability, security, flexibility, and continuity.  

ITC gave its submission in response to a consultation paper floated by the regulator Trai on the possibility of allowing corporate houses to set up and run their own private 5G networks to make industry 4.0 a reality.

In a private cellular network, the infrastructure is used exclusively by devices authorised by the end-use organisation, such as those within the factory premises or for machine-to-machine connectivity. The move by ITC is significant as it could spur a new battle and this time it will be a battle between large enterprises and telecom companies over the use of 5G spectrum.

Telecom firms have vehemently opposed ITC’s proposal. Their industry body, the Cellular Operators Association of India, has made it clear that there is no justification for ‘private networks’ at all as telecom companies are capable of providing all the services enterprises need, including machine-to-machine services. In short, there is no need to allocate spectrum directly to companies.

The telecom companies have also opposed giving out spectrum without auction on the grounds that this will lead to a non-level playing field.

But ITC has listed three reasons why the sub-leasing of spectrum from telecom companies does not work and why they need spectrum to be given to them directly. One, the price charged by them could be a deterrent as they can form a monopoly in specific regions based on their licences.

Two, it may be difficult for them to get spectrum from telecom companies owing to the unavailability of networks in the region.

Three, telecom companies may face a dilemma between their obligation to roll out 5G for public networks as against the demands of private networks.

ITC has also suggested the spectrum bands which should be reserved for private networks: 20 MHz band in the 3400 to 3425 band which is earmarked as a band for 5G and also another 400-800 MHz in the millimetre band between 26 and 28 GHz.  

The move to provide spectrum directly to companies is already a global trend. Germany, for instance, has already issued private licences to over 123 companies for their 5G campus networks at an administrative price. Those who run exclusive networks include BASF, BMW, Bosch, Lufthansa, Siemens and Volkswagen.

In France, airport operator ADP Group and electricity company EDF have joined the bandwagon. In the US, John Deere, a farm equipment company, has been given a licence to build a flexible factory network.

According to the Global Mobile Suppliers Association or GSA, as many as 45 countries with private network deployments on LTE or 5G have been assigned private mobile network spectrum licences.

The ITC stance is supported by the Broadband India Forum (BIF) which counts Facebook, Google and Microsoft as its members and which is also pushing for spectrum at nominal fees. As BIF president T V Ramachandran explained recently in an interview, a private network with limited coverage is of interest only to that particular enterprise.

“The 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. There is no reason to auction spectrum. Administrative allocation is the way,” said Ramachandran.

The difference of opinion is understandable. Currently, enterprise acc­ounts for less than 10 per cent of revenues for telecom firms but this is expected to go up to over 40 per cent with the advent of 5G because the use of 5G will increase in factories and other premises. As the pie grows, everyone wants a part of it.