5G Roll-Out To Be Ineffective If Key Issues Not Addressed: Industry Body
The Cellular Operators Association of India (COAI) has warned that there will be no business case for the roll-out of 5G networks if the concerns of telecom operators on the critical issue of private captive networks are not addressed immediately.
In a letter to Communications Minister Ashwini Vaishnav, COAI said that if independent entities are allowed to set up private captive networks with direct 5G spectrum allocation by the Department of Telecom, “the business case of TSPs (Telecom Service Providers) will be seriously damaged”.
“This will reduce revenue to such an extent that there will be no viable business case for TSPs and there will be no need for 5G network roll-out by TSPs,” it said.
The comments of COAI – whose members include Reliance Jio, Bharti Airtel and Vodafone Idea – assume significance as telecom operators and tech companies lock horns over the hotly-competitive issue of 5G spectrum allocation and private private networks.
Private enterprises have insisted that giving spectrum without relying directly on telcos to build captive networks will accelerate the digital agenda – a stance that has been strongly opposed by telecom operators.
“The roll-out of 5G services by TSPs will be rendered useless by providing dedicated spectrum for private captive networks,” COAI said in the letter.
COAI members have learned, during interactions with their corporate clients (also served by other entities), that these ‘other entities’ are committed to corporates to establish their own private 5G captive networks by direct allocation of spectrum. will be able to. by the Department of Telecommunications (DoT), the association said.
Globally, it has been argued, wherever 5G is rolled out, it has been observed that there is hardly any resultant revenue growth from the retail segment. The increase in revenue and efficiency can only come from the enterprise segment, it informed.
“In this regard, as you are aware that the voice and data needs of the entire country are being adequately met by TSPs today through their 4G network. Thus, the revenues of TSPs from the retail sector are very high. Not going to increase despite huge capital investment for roll-out of 5G network,” wrote the letter to SP Kochhar, Director General, COAI.
This is further compounded as India is a highly price-sensitive market especially in the consumer segment.
Therefore, the new segment to benefit from 5G services of telecom operators is the enterprise segment including manufacturing, logistics, education, hospitals, campuses and factories.
Telecom operators have also successfully tested 5G for many of these use cases over the past year. With the 5G auction, telcos are targeting the enterprise segment for revenue growth and overall increase in productivity and efficiency. “This is where TSP’s 5G business case lies,” COAI insisted.
If private captive networks for enterprises are set up independently by other entities, it would mean dramatically changing the dynamics of the industry and harming the financial health of the industry, and such a business case would strike the heart. , it is considered.