The private telcos in India, including Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi), have been working on 5G for a long-time now. But now, there’s something that threatens all the money spent by the telcos on the R&D (Research and Development) of new products and use-cases relevant to 5G. The government might be considering allocating spectrum to the enterprises in an administrative manner so that they can set up their own captive private networks with the power of 5G. But the telcos are not happy with this development at all.
COAI Writes to Ashwini Vaishnaw Regarding the Same
On Wednesday, COAI (Cellular Operators Association of India) shared its hard stance on how the spectrum should only be offered through auctions to licensed access service providers. On the same day, the industry body which represents the private telcos had also written a letter to Ashwini Vaishnaw, Minister for Communications, on the issue of private captive networks.
COAI said that there would be “no business case for roll out of 5G networks” if enterprises were given spectrum directly. In simple words, COAI means that if the captive private networks are rolled out by enterprises themselves, the telcos won’t have the incentive to invest thousands of crores into spectrum and infrastructure to rollout 5G services as their RoI (return on investment) will not be worth it.
5G use cases demonstrated so far suggest that they are more relevant for the enterprises than the consumers directly. Thus, the telcos are not happy that they won’t have any major benefit from rolling out 5G in the country when their services won’t even be required by the enterprises.
COAI noted that worldwide it had been noticed wherever 5G has been rolled out, the incremental revenues have hardly come from the retail segment. Instead, the incremental revenues have only come from the enterprise segment.
Because the telcos are already able to provide sufficient and satisfactory services to consumers with 4G networks, they won’t upgrade to 5G just for the consumers as the RoI won’t make sense. Only when the telcos see there’s a need and demand for 5G in the enterprise segment would they roll out 5G networks.
COAI told Vaishnaw that if the spectrum is directly given to the enterprises for private 5G, it would mean no viable business case left for the telcos in India, and thus there will not be any need for 5G rollout in the country.
