With 5G on the horizon, private networks have emerged as a means to create smart factories and scale up Industry 4.0 deployments. Private networks enable enterprises to use mobile technologies for wireless integration in smart factories and logistics operations, and for autonomous machine deployments, processing of materials, etc. Private networks facilitate the deployment of industrial internet of things (IoT) for building “smart” features through artificial intelligence (AI) and machine learning. Increasingly, enterprises across sectors are warming up to the idea of deploying private networks to increase business efficiency.
Private mobile network deployments are now truly global, with the Global Mobile Suppliers Association (GSA) registering 68 countries and territories where customers have deployed private networks based on either long term evolution (LTE) or 5G technology. As per the latest data released by the GSA, about 794 organisations worldwide are deploying LTE or 5G private mobile networks, and over 70 telecom operators are undertaking these projects. Despite the global roll-out of 5G networks, LTE is more widely preferred among organisations (76 per cent) for private network deployments. As per GSA data, the manufacturing sector is the largest adopter of private networks with 140 organisations involved in known pilots or deployments as compared to 111 in 2021. The education and mining sectors follow.
The India story
In line with the global markets, the Indian government has taken steps to facilitate the deployment of private networks. In June 2022, the union cabinet decided to enable the development and setting up of private captive networks to spur a new wave of innovations in Industry 4.0 applications such as machine to machine (M2M) communications, IoT and AI across the automotive, healthcare, agriculture, energy and other sectors. Following this, the Department of Telecommunications (DoT) issued guidelines to facilitate spectrum leasing, thereby allowing telcos to lease spectrum to companies to set up captive private networks.
The guidelines allow private companies to obtain IMT spectrum from one or more telecom service providers (TSPs) with access service licences on mutually agreed terms and conditions. As per the guidelines, telcos and private companies leasing spectrum have to ensure that there is no interference with any public network or any other licensed user of spectrum. Further, TSPs have to submit the details of the spectrum bands, quantum of spectrum in each band, period of lease, geographic area of lease, geo-coordinates of the logical perimeter of the defined premises, and spectrum use to DoT within 15 days of entering into the leasing agreement.
Enterprises setting up private captive networks can obtain spectrum directly from DoT as well. TSPs are also allowed to offer captive networks as a service to enterprises through network slicing over its public network. DoT will undertake demand studies and seek recommendations from the Telecom Regulatory Authority of India for direct assignment of spectrum to such enterprises. Enterprises seeking spectrum directly from the telecom department would be given a renewable licence for 10 years against a non-refundable application charge of Rs 50,000. Such companies will be exempt from paying any entry or licence fee. The guidelines further note that companies leasing spectrum to set up captive networks will have to obtain an online clearance and import certificate from the Standing Advisory Committee on Frequency Allocation. They also state that the revenue earned by TSPs through leasing spectrum will form part of their gross revenue. According to the guidelines, entities that apply for spectrum need to have a minimum net worth of Rs 1 billion. The applicant must be registered under the Companies Act and be an occupant of the geographical area/property on which it intends to establish the captive private network.
Industry reaction to the cabinet decision on private networks has been mixed. Some industry bodies such as the Broadband India Forum (BIF) have supported the cabinet’s decision to permit captive private 5G networks, stating that it is a progressive move that keeps in mind the overall growth and advancement of the country, consumer benefits, technology adoption and continued reforms for the benefit of all stakeholders, which will eventually lead to greater economic and socio-economic gains of the country. This will, in turn, accelerate the digital transformation of enterprises to Industry 4.0, generate more job opportunities, and provide an impetus to the national missions of “Atmanirbhar Bharat” and “Make in India”, the BIF states.
However, the Cellular Operators Association of India (COAI) has expressed its disappointment with the government’s decision to allow captive private networks to participate in 5G spectrum allocations. It has called for a level playing field, arguing that solution providers should also pay licence fees and goods and services tax at the rates applicable for telcos on the billed amount of revenue. The COAI has also requested the authority to ensure that such captive networks remain truly private and isolated, and adhere to security norms.
Despite these contrasting views, the government has decided to go ahead with its decision to allow the auctioning of captive private networks in the upcoming 5G spectrum auctions. The Adani Group has become the first entity to announce its participation in the 5G auctions through its subsidiary, Adani Data Networks. Adani Data Networks has been issued a letter of intent by DoT for grant of a unified licence with authorisation for ILD (national area), NLD (national area), and ISP-B in the Gujarat circle. The licence will allow the group to provide long distance calling and internet facilities in the Gujarat circle. The group has stated that it intends to use the spectrum for captive private networks and has no plans to offer consumer mobility services.
Testing use cases
While the government is yet to conduct spectrum auctions for captive private networks, some pilot runs have been conducted to test the use cases for private networks. For instance, in March 2022, Vodafone Idea Limited (Vi) and Larsen & Toubro (L&T) Smart World and Communication came together to establish the use case for a private LTE enterprise network in India. The two companies carried out an accelerated proof of concept at L&T Heavy Engineering’s A.M. Naik Heavy Engineering Complex in Hazira (Surat).
Commenting on the collaboration, Arvind Nevatia, chief enterprise business officer, Vi, said, “We are excited to partner with L&T Smart World and Communication to build a complete solution for private LTE with cutting-edge applications on future-ready 5G network infrastructure based on technology expertise from Nokia. This collaboration will demonstrate our strength and capabilities to deliver solutions for the enterprises of tomorrow, driving faster adoption of Industry 4.0 in India.”
Besides telecom operators, Indian IT firms are also looking at deploying private 5G networks. For instance, Tata Consultancy Services is looking to build private 5G networks on its campuses over the next six months, while engineering services provider L&T Technology Services has already established a 5G lab in Bengaluru and is preparing to launch another lab in Mysuru for developing use cases in the medical equipment and manufacturing solutions space.
The way ahead
Private networks seem to be the next big thing in the global telecom arena, especially with the advent of 5G. A number of global operators have entered into partnerships to pursue the emerging opportunities in this space. However, for larger adoption of 5G private networks, viable business and technology models need to be developed and the right mix of partners selected in order to enable the co-creation of solutions.
Kuhu Singh Abbhi