Blog

Amid opposition by telecom companies to allowing private captive 5G networks, the Department of Telecommunications (DoT) has issued guidelines for setting up such captive non-public networks (CNPN).

The DoT has stipulated a minimum net worth of INR 100 Cr for enterprises seeking spectrum from the government for private captive networks. The applicant will also be required to be a registered company under the Companies Act, 2013 and should be the occupant of the area for which the private captive network is sought.

Essentially, private captive networks are set up by private entities for their own use. 

The licensees will not have to pay any entry fee or licence fee. However, the applicants will have to pay a one-time non-refundable processing fee of INR 50,000.

The DoT also said that private captive networks cannot not be used for providing commercial telecommunication services in their area of operation. The licence will be valid for a period of 10 years, post which it can be renewed. 

Each licensee will be allotted a unique CNPN number and will be bound by existing foreign direct investment (FDI) norms in the country. The candidates will also be required to follow stipulated network security norms regarding procurement of telecom equipment from trusted sources.

On the other hand, telcos with access service licence (ASL) will also be eligible to offer the service to various enterprises. Telecom providers will also be eligible to provide isolated CNPN for enterprises via the IMT spectrum acquired by them. 

Companies looking to deploy CNPN via telcos will have to seek licences for each geographical location separately. 

Telecom companies will have to submit specific details to the DoT within 15 days of entering into a leasing arrangement with enterprises. These details include 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 its use.

Telcos Up In Arms

Telecom companies have been opposing the decision to approve private captive networks. The move could kill a prospective cash cow for telecom players that were looking to leverage CNPNs to bolster their revenues. 

5G networks will enable enterprises to leverage high-speed internet to power new technology-based products based on artificial intelligence, internet of things (IoT), machine-to-machine (M2M) communication, among others. 

Allowing enterprises to have their own private captive networks could deprive the telcos of a parallel revenue stream. 

Earlier, industry body Cellular Operators Association of India (COAI) had written to the DoT saying that the allocation of 5G spectrum directly to private enterprises could enable these firms to gain a backdoor entry into telecom services despite not having a telecom service provider licence.

COAI also urged the government to assign private captive networks in the non-IMT/5G bands. This demand appears to have been rejected by the government.

The industry also demanded that the private networks be mandated to obtain spectrum via auctions to level the playing field. 

Earlier this month, Telecom Minister Ashwini Vaishnaw asserted that 5G services will be deployed across 20-25 cities and towns of the country by the end of the year. The Union Cabinet has given its nod to conduct 5G spectrum auctions by the end of July this year.