Industry body COAI on Thursday said administrative allocation of spectrum for private 5G networks will be against tenets of level playing field as it lauded use of open bidding and transparent auction route by companies seeking 5G airwaves. Administrative allocation of spectrum for captive 5G networks is against principles of level playing field and "effectively provides a backdoor entry to big technology players to provide 5G services and solutions to enterprises in India" without equivalent regulatory compliance and payment of levies that telcos are subject to.
The sector is poised for mega 5G spectrum auction, scheduled to be held later this month.
COAI's comments come against the backdrop of billionaire Gautam Adani's group making a surprise entry into the race to acquire telecom spectrum that will pitch it directly against Mukesh Ambani's Reliance Jio and telecom czar Sunil Bharti Mittal's Airtel during the upcoming auction.
Adani Group on Saturday said it is in the race to acquire spectrum, which it said will be used to create a private network to support its businesses from airports to power as well as data centres.
A unit of billionaire Gautam Adani's flagship Adani Enterprise Ltd, a subsidiary of Reliance's digital arm as well as Bharti Airtel and Vodafone Idea have applied to participate in the July 26 auction of 5G spectrum.
Total 72 GHz of spectrum worth at least Rs. 4.3 lakh crore will be put on the block during the auction.
"We are happy to note that companies wanting to use 5G spectrum have made applications for open bidding of the spectrum through a transparent auction process, which ensures that level playing field is maintained and all interested parties bid for the spectrum required by them," Cellular Operators' Association of India (COAI) said in a statement.
India's structured licencing framework has helped orderly growth of digital connectivity landscape. The opening up of access to spectrum to enterprises directly disturbs the level playing field, it said.
The spectrum should not be provided on administrative basis, emphasised the industry association, whose members include all three private telcos, Reliance Jio, Bharti Airtel and Vodafone Idea.
"The spectrum should not be provided on administrative basis as it leads to no business case for the rollout of 5G networks in the country," S P Kochhar, director general of COAI said.
If the independent entities set up private captive networks with direct 5G spectrum allotment by the telecom department, it will diminish the revenue so much that there will be no viable business case left for telecom service providers (TSPs) and there will not remain any need for 5G networks rollout by telcos.
COAI stressed that licenced access service providers are fully capable of providing these services most competitively and economically compared to private companies.
"Any consideration of administrative allocation of spectrum for such networks is fundamentally against principles of level playing field and effectively provides a backdoor entry to big technology players to provide 5G services and solutions to enterprises in India without equivalent regulatory compliance and payment of levies that TSPs are subjected to," COAI said.
While the 5G spectrum in nine frequency bands will be auctioned, the Notice Inviting Applications -- the bid-related document issued by the telecom department -- said tech firms will be allowed to take the 5G spectrum for their captive non-public network on lease from telecom companies.
The direct allocation of spectrum to tech companies will follow a demand study and the sector regulator's recommendation on aspects such as pricing and modalities of such allocation.
The lucrative enterprise 5G is considered a major money-spinner for players, and the decision on private networks has dealt a blow to telcos, who had been arguing that if independent entities are allowed to set up private captive networks with direct 5G spectrum allotment by the telecom department, the business case of TSPs will get severely degraded.
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