India paves the way for 5G spectrum and captive private 5G networks

The Indian government has opened the door for 5G telecom spectrum auctions for both public telecom services and private networks for enterprise use.

The Indian cabinet agreed on Wednesday to open up the 5G spectrum auction process, as well as allowing enterprises to acquire spectrum directly from the government and set up captive ‘non-public’ networks.

Although 5G is expected to offer 10 times faster connectivity compared to the existing 4G networks, the low-latency network has a far bigger potential for private networks, where it can used for a myriad of latency-sensitive services, including telemedicine, autonomous driving, and online gaming.

This will “spur a new wave of innovations in Industry 4.0 applications such as machine to machine communications, Internet of Things (IoT), Artificial Intelligence (AI) across automotive, healthcare, agriculture, energy, and other sectors,” the government said in a statement.

The access to non-telcos is broadly seen as a welcome step, one that could spur innovation and speed up the development of new use cases that will expand the potential impact of 5G on the Indian economy.

“To boost technological advancement the government has also announced development of private networks which will pave the way for Industry 4.0 applications. Together these steps will open up newer avenues for deeper penetration and access rich user experience via consolidation,” says Peeyush Vaish, partner and telecom sector leader at Deloitte India.

Faisal Kawoosa, chief analyst at Techarc sees 5G adoption having the biggest impact in the healthcare space, but the most economic impact coming from business-to-business use cases. “To me, infrastructure companies can leverage private 5G networks the best, as they can utilize it for connected infrastructure solutions,” he said. “There might be some advantage to manufacturing as well, especially automobile.”

The announcement is seen as a massive opportunity for telecom equipment makers such as Nokia, Ericsson, and Samsung, who have already conducted 5G technology trials in the country. Kawoosa also believes that enterprise 5G will be less price sensitive when compared with the mass consumer space, where Chinese players such as Huawei and ZTE have a dominant play.

While India hasn’t followed the lead of countries like the UK and Canada in outright banning Chinese vendors from selling telecom equipment in the country, it has kept them out of 5G technology trials last year.

“This is the time for the Indian telco ecosystem to quickly work on creating low-cost alternatives [to Chinese equipment], which will then help in the mass spread of 5G services within enterprises. Cisco, Ericsson, and Nokia have immense potential for the Indian ecosystem—including the Indian Institutes of Technology, government R&D center C-DOT (Center for Development of Telematics) and some local companies like VVDN—to foray into telecom equipment jointly, with affordability at their core,” Kawoosa said.

Telecom versus non-telecom firms

While the Indian department of telecom’s (DoT) decision has allowed non-telecom players to have a bigger say in Indian 5G network rollouts, the government is yet to clarify the timeline around when non-telcos will be able to provide private network services. The telecom regulatory authority of India’s earlier recommendations on the 5G spectrum, on the other hand, had specified the exact spectrum bands that could be allocated to enterprises.

In its recommendations, issued in April, the Telecom Regulatory Authority of India had suggested that the DoT may consider “identifying 4800-4990 MHz for IMT purpose and explore the possibility of carving out some spectrum in this frequency range for the purpose of earmarking for private network.” However, no such spectrum has been identified in the DoT notification issued on Wednesday.

At the same time, telecom operators will have access to service authorization and will be allowed to provide private networks as-a-service through network slicing over public networks. They will also be allowed to lease their spectrum to enterprises to setup their own private networks.

The DoT is yet to release the required licensing terms and conditions and spectrum leasing guidelines.