Private 5G: Tech firms junk telcos' revenue loss theory

The fight between India's top telcos and tech companies has escalated over direct spectrum allocations to enterprises for private 5G networks.

Tech companies have junked a key claim of telcos that the advent of private 5G networks would rob the latter of precious enterprise service revenues and kill the 5G business case in India. Instead, they said carriers stand to make more money as enterprises setting up their own captive private 5G networks would be far more productive, have a wider range of business activities and spend more on external communications, which would garner higher revenues for operators.

"It's a misconception that private 5G networks would lead to revenue losses for telcos as expressed by certain entities, and the speculated loss in revenues via enterprise services is a misplaced one," the Broadband India Forum (BIF) said in a statement Thursday.


The BIF, which counts Tata Consultancy Services (TCS), Cisco, Amazon, Google, Microsoft, Facebook-owner Meta, Qualcomm and Intel among its key members, has called on the government to directly allocate 5G spectrum to private enterprises at a nominal administrative fee in line with global best practices.

Its comments come amid telcos' repeated claims that direct spectrum allocations for private 5G could rob them of future 5G enterprise business revenues - estimated at almost 40% of overall 5G revenues. Sweden's Ericsson has pegged the 5G-for-business opportunity in India at $17 billion by 2030.

According to BIF, bulk of telco enterprise revenues stem from external network services, comprising voice and data communications. "So a more efficient captive network through private 5G would increase the productivity of an enterprise that would help grow its business activities/external communications, driving better revenues for telcos." But telcos disagreed, saying there would be no business case to splurge top dollar in the upcoming spectrum auction and on 5G rollouts if DoT makes direct 5G airwave allotments to independent enterprises for private networks.

"The business case of TSPs will get severely degraded, which would diminish the revenue so much that there won't remain any need for 5G network rollouts by telcos," the Cellular Operators Association of India (COAI) said in a letter, dated June 8, to Telecom Minister Ashwini Vaishnaw.

The body, which represents Reliance Jio, Bharti Airtel and Vodafone Idea (Vi), added that wherever 5G has been rolled out, "the revenue and efficiency enhancement" can happen only from the enterprise segment.

The broadband lobby body, though, dismissed COAI's other claim about direct spectrum allotments for private 5G robbing the exchequer of revenue. "There would be no revenue loss to the government as is being apprehended in some quarters as enterprises would purchase spectrum at a price to be fixed by the government and allocated administratively," it said.

The latest war of words also came after mobile carriers warned that establishing private 5G networks is legally untenable, in the wake of the apex court ruling that all airwaves be auctioned. The BIF, though, said the ruling has been misinterpreted, and cited

Presidential Reference No 1 of 2012, wherein, the top court had said, in its advisory jurisdiction, that "auction, as a method of disposal of natural resources, cannot be declared to be a constitutional mandate under Article 14 of the Constitution of India".

The apex court, the BIF said, had further noted that "...revenue maximisation may not always be the best way to serve public good".

The broadband body also rejected telco worries around anti-social elements exploiting such networks to bypass interception and monitoring of messages. These networks, it said, are not connected to external public networks, and so the need for lawful monitoring, interceptions and the possibility of threats to national security don't arise.

The face-off is seen as a key reason for the delay in spectrum auction modalities being taken up for Cabinet approval.