Industry body COAI has warned that there will be no business case for deploying 5G networks if telecom operators’ concerns over the critical issue of private captive networks are not addressed immediately.

In a letter to Communications Minister Ashwini Vaishnaw, COAI said that while independent entities are allowed to set up private captive networks with direct allocation of 5G spectrum by the Department of Telecoms, “the business case for TSPs (telecommunications service providers) would be seriously degraded”.

“It will diminish revenue so much that there will be no viable business case left for TSPs and there will be no remaining need for 5G networks to be deployed by TSPs,” he said.

Comments from COAI – whose members include Reliance Jio, Bharti Airtel and Vodafone Idea – matter as telecoms operators and tech companies have clashed over the highly contentious issue of 5G spectrum and network allocation. private captives.

Private companies argued that giving away spectrum directly for the creation of captive networks, without any reliance on telecom operators, would accelerate the digital agenda – a position telecom operators vehemently opposed.

“Giving up dedicated spectrum to private captive networks will render deployment of 5G services by TSPs unnecessary due to lack of business case,” the Cellular Operators Association of India (COAI) said in the letter, seeking urgent intervention. of the Minister in the question.

Members of the COAI, during their interactions with their enterprise customers (also served by other entities) have learned that these “other entities” commit to the enterprises to be able to set up their own private 5G captive networks by direct allocation of spectrum by the Department of Telecommunications (DoT), the association said.

Globally, he argued, wherever 5G has been deployed, there has been virtually no consequent increase in retail segment revenue. Improvement in revenue and efficiency can only happen from the corporate segment, he advised.

“In this regard, as you know that the voice and data needs of the entire nation today are adequately met by TSPs through their 4G networks. As such, TSP revenues are not going to increase from retail segment despite very heavy capital investments for the deployment of 5G networks,” COAI Managing Director SP Kochhar wrote in the letter.

This is further amplified as India is a very price sensitive market, especially in the consumer segment.

Thus, the new segment that would benefit from 5G services from telecom operators in the enterprise segment includes manufacturing, logistics, education, hospitals, campuses, and factories.

Telcos have also successfully conducted 5G trials for many of these use cases over the past year. With 5G auctions, telecom operators are targeting the enterprise segment for improved revenue and an overall increase in productivity and efficiency. “Therein lies the business case for 5G TSPs,” COAI asserted.

If private captive networks for enterprises are set up independently by other entities, it would mean radically altering the dynamics of the industry and harming the financial health of the industry and will strike at the very heart of such analysis of payback, he said.

“If independent entities set up private captive networks with direct assignment of 5G spectrum by the DoT, the business case for TSPs will be severely degraded. TSPs and there will not remain any need for deployment of 5G networks by TSPs,” COAI lamented.

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