COAI writes to DoT requesting urgent intervention on setting up of private networks

The Cellular Operators Association of India (COAI) has written to the Department of Telecommunications (DoT)urging for an intervention on setting up of private network. The note mentions that the industry body has been informed that other entities are promising these corporates that they would be able to meet their growing technological needs by setting up private 5G captive networks of their own by direct allotment of spectrum by DoT.

Elaborating further, COAI noted that across the globe it has been seen statistically proven that wherever 5G has been rolled out, there is hardly any consequent revenue increment from the retail segment. COAI asserts that the revenue and efficiency enhancement can happen only from the enterprise segment.

The COAI has further made the ministry aware that the needs of voice and data of the entire nation is being adequately met by the TSPs through their 4G networks today. As such the revenues of TSPs are not going to increase from the retail segment despite very heavy capital investments for rollout of 5G networks. According to COAI, this is further accenuated because India is a highly price sensitive market especially in the consumer segment.

The new segment that would be benefitted by 5G services of the TSPs is the enterprise segment including manufacturing, logistics, education, hospitals, campuses, factories, etc. The TSP members of COAI have also conducted successful 5G trials for many of these use cases in the last one year. With 5G auction, the TSPs are targeting the enterprise segment for revenue enhancement and overall increase in productivity and efficiency.

Raising concern, COAI noted that if private captive networks for enterprises are set up independently by other entities then this would mean dramatically altering the industry dynamics and hurting the financial health of the industry and will strike at the very heart of the business case enumerated above. Meanwhile, if independent entities set up private captive networks with direct 5G spectrum allotment by DoT, the business case of TSPs will get severely degraded. This will diminish the revenue so much that there will be no viable business case left for the TSPs and there will not remain any need for 5G networks rollout by TSPs.