According to the guidelines for establishing captive non-public networks (CNPN) released by the Department of Telecommunications (DoT) on Monday night, entities applying for spectrum must have a minimum net worth of Rs 100 crore. The applicant must be registered under the Companies Law and be “occupant of the geographical area/property in which he intends to establish the CNPN”. A private captive 5G network is powered by mobile broadband technology and is set up by a private entity for use by a single organization. It is similar to a captive coal mine.
To obtain spectrum directly from the government, the DoT will conduct demand studies and then seek recommendations from the Telecommunications Regulatory Authority of India (TRAI) for direct allocation of spectrum to such companies.
Spectrum lease rules
Department of Transportation officials said this process could take a year or two.
Meanwhile, companies that want to set up their own captive private 5G networks will need to lease spectrum from carriers or have telcos set up the networks for them.
The Department of Transportation also released amendments to the Unified License and Unified Access Service License on Monday, allowing telcos to lease spectrum to CNPN licensees.
It also issued spectrum leasing rules, which allowed telcos to lease auctioned IMT (5G) spectrum to CNPN licensees. “In such a case, the telecommunications service provider must present the details of the spectrum band, the amount of spectrum, the lease period, the geographical area, the geographical coordinates of the logical perimeter of the defined facilities and the use of spectrum in the Saral Sanchar Portal within 15 days after the conclusion of the agreement”, says the guideline.
The guidelines also clarified that income earned from spectrum leasing will form part of a telecommunications company’s gross income. Gross revenue is used to calculate a telecommunications company’s license and spectrum usage fee that it pays to the government.
TV Ramachandran, chairman of the Broadband India Forum (BIF), said the Rs100 crore net worth criterion “is a real brake” that would hamper the massive proliferation of captive 5G networks.
“We hope that DoT will reconsider this proposal as, if implemented in its current form, only a few large tech companies would meet the Rs 100 crore net worth criterion, while many others equally capable, from scientific institutions from big-name to tech start-ups, they will win. Not be eligible for direct 5G spectrum assignments,” Ramachandran told ET.
However, the BIF chairman welcomed the Department of Transport’s decision not to charge independent companies any license/entry fees for establishing 5G captive networks, saying the move was in line with Trai’s recommendations and the decision. of the Cabinet on captive networks.
The BIF counts among its members technology companies such as Tata Consultancy Services, Cisco, Amazon, Google, Microsoft, the owner of Facebook, Meta, Qualcomm and Intel.
The guidelines come amid a bitter fight between telecommunications and technology companies over control of 5G spectrum to be used for CNPNs. Telecom operators fear that access to spectrum without auctions will allow tech companies to offer 5G services similar to what carriers would be offering to businesses at a much lower cost.
Telecommunications companies deplored the Department of Transport’s decision not to charge independent companies any license/entry fees.
“Basically, the government has paved the way for administrative allocation of 5G spectrum to big tech companies that can easily meet the Rs 100 crore net worth criterion, which is extremely unfair as it expects companies to telecommunications companies, on the contrary, buy these coveted radio waves”. blowing billions at the next auction,” said a senior executive at a Big 3 telecommunications company.
He said this proposal “amounts to cross-subsidizing big tech corporations, as they will get top-tier spectrum by paying a nominal processing fee, while telcos will have to bid on expensive spectrum and pass the higher costs on to the consumer.” , which will ultimately make 5G unaffordable for the masses.”
In accordance with Department of Transportation guidelines, companies may establish an isolated ‘indoor/on-premises’ CNPN for their own use. The CNPN license may not be used for commercial telecommunications or connect the captive user’s network to public networks in any way.
Licensees that have operations in more than one location do not need to apply for different licenses. As they need to set up private captive networks in new locations, they need to update the geographic coordinates of the new locations in the Saral Sanchar Portal before requesting spectrum.
All elements of the network, including the main network, will be established within the area of operation of the license. However, companies can connect different locations with captive networks using leased lines from telecommunications service providers.
CNPN licensees will be bound by existing foreign investment rules and will be required to follow relevant network security conditions and instructions regarding the acquisition of telecommunications equipment from trusted sources, according to the guidelines. They are also required to follow the radiation standards in effect at the time of the creation of the captive network.
In both the leasing from the operators and the direct procurement from the government, the entities involved must obtain authorization online from SACFA (Permanent Advisory Committee on Frequency Assignment) and ensure that the established CNPN does not interfere with any public network or the network of any other licensed spectrum user.
At least 794 organizations and 70 telecom operators are deploying private LTE or 5G networks, according to the global association of mobile providers. The manufacturing sector led with 140 companies involved in pilots and implementations, followed by the education and mining sectors.