TRAI's Private 5G Network Proposal: Hopes Rise for Enterprises in India

The Telecom Regulatory Authority of India (TRAI) is reportedly proposing to allow enterprises and businesses in India to set up their own private 5G networks. Currently, this is not viable under the existing regulations. The government may approve TRAI's new proposal, which would allow many of the major organizations in India to create private 5G networks at much less cost as enterprises would be able to directly acquire spectrum at the government stage.

Key Points of the Proposal

• Direct Spectrum Access: TRAI has also recommended that private companies such as Infosys, Tata Communications and others should be allowed to set up their own private 5G networks through direct spectrum access.
• Lower Upfront Cost: The Removal of Certain Current Restrictions on Private Lattice Networks Seeking Direct Access to Spectrum could help reduce their Upfront Cost by 40% with a Big Potential to accelerate Enterprise 5G Adoption within the Country.
• New Authorization Framework: A separate authorization framework for captive non-public network (CNPN) providers should be made as per Section 3 of the Telecommunications Act, 2023 which is responsible for establishing, maintaining, operating and expanding networks for enterprises, TRAI recommended.
• Section 3 of the Act permits the government to assign spectrum administratively to entities in different sectors, including defense, law enforcement, and disaster management.

Impact on Telcos

Telecom players, including Bharti Airtel, Reliance Jio and Vodafone Idea, have opposed allotting spectrum without auctions since they pay a huge amount to buy spectrum through auctions, which creates an uneven level playing field. Telecommunication companies have considered private networks established by unlicensed entities as a potential national security risk.

The value of the enterprise business of telecom firms stands at around ₹64,700 crore or 20% of their revenue, which may be at risk if private firms were permitted to establish their own networks using administratively allocated bandwidth. Private networks are viewed as a large 5G monetization opportunity for telcos.

Benefits for Enterprises

This proposal could be a boon for the enterprises, as it can lower the cost of implementing and maintaining private 5G networks. The real boost, however, could come from enterprises that want to use private 5G, without needing to lease spectrum from telcos, demand for more than 10,000 projects, according to the Voice of Indian Communication Technology Enterprises (VoICE), which last year said that acceptance of TRAI recommendations would be a "game changer".

Global Context

Right now, India has only 10 private 5G networks, while they number over 170 in the US, and more than 50 in China and Germany combined. According to VoICE, the global private LTE and 5G networks market was projected to surpass $16 billion by 2026, while in India, it is set to exceed ₹24000 crore, growing at an annual rate of 40%.

CNPN deployments should benefit sectors such as industry 4.0, railways, defense, CPWD and metro. Private networks have already been allocated spectrum in US, Canada, France, Sweden, Japan and other 16 countries.

Challenges and Legal Aspects

Sections 3 & 4 of the Telecom Act (which pertain to authorization and assignment of spectrum) have not yet been notified by the Department of Telecommunications (DoT). As the First Schedule of the Act does not envisage spectrum use by private companies for providing services and in particular, the statutorily sanctioned establishment of CNPN, the allocation/assignment of spectrum for CNPN cannot be done through an ‘administrative process’ without amending the First Schedule, said Sanjeev Kumar, partner at law firm Luthra & Luthra.