Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi) have opposed the move of spectrum allocation to corporates/enterprises for setting up their own 5G networks. In the next few days, the Telecom Regulatory Authority of India (TRAI) is expected to come out with its recommendations for the 5G spectrum auction. Before that, according to a Financial Express report, the private telcos have strongly suggested that corporate must not be allocated spectrum to set up their own 5G networks.
If this is allowed, the telcos said that their participation in the upcoming spectrum auction would be lukewarm. This poses a threat to the government revenues. But if the government decides to allocate spectrum to corporates for private 5G, it would hurt the enterprise revenues of the telecom operators. Since 5G looks more like an enterprise play right, for now, it wouldn’t make sense for the telcos to invest in the 5G spectrum if the corporate can set up their own private 5G network.
Bharti Airtel to be the Most Affected Telco if Enterprise Revenues are Hit
Bharti Airtel, the second-largest telecom operator, gets approximately 20% of its revenues from enterprise services. If the TRAI recommends that the government can allocate 5G spectrum for setting up the private network for enterprises, it will affect Bharti Airtel a lot. In the enterprise segment, Bharti Airtel is the leading telecom operator in the country.
The telcos are also worried about the absence of a level playing field. The corporates won’t have to maintain and comply with all the obligations that the telecom operators need to do; thus, it would clearly result in an unfair environment for the telcos.
The concept of private LTE networks is gaining traction throughout the world. With 5G, the role of private networks would become more significant. There are a lot of advantages to the presence of private networks as well. While the telcos are definitely going to lose money if the government allows corporates to set up their own private 5G networks with spectrum allocation, it would also mean that network connectivity can reach parts of the country where the telcos aren’t interested in going because of less economic viability.
