A case for the non-competing CUG

Denying direct spectrum allocation to enterprises would be unfair, as Private 5G networks can play a critical role in India Inc’s digitalization efforts.

Private 5G networks are gaining momentum and presenting exciting digitalisation opportunities for the entire industry, including the telecom sector. According to an ABI Research report, as of May 2023, globally there were nearly 1,000 private cellular networks for enterprises indicating a massive surge in Private 5G networks as compared to last year. This also indicates that world-over enterprises across sectors are seriously driving improved efficiencies through digitalisation.

India’s size, population, and digital aspirations would naturally lead one to expect the existence of numerous private networks, perhaps around 100-150, and a growing trend in this direction. Regrettably, this is not the case, as there is currently no operational private network, be it 4G or 5G, in the country. However, this situation presents incredible growth opportunities for India. According to a report by NASSCOM and Arthur D Little, there is an estimated revenue potential of USD 1.5 trillion across 10 industries by 2030, indicating that a significant portion of this potential can be targeted and achieved.

Private 5G networks provide enhanced control, security, and reliability, tailored to meet the specific needs of the organisation.

Private networks are like Closed User Groups or CUGs and do not compete with licensed public telcos or encroach on their turf.

It is crucial to recognise the unique value proposition that private networks offer, providing dedicated and localised connectivity solutions for enterprises, industries, campuses, or smart cities. Unlike the public cellular networks – Public Land Mobile Network (PLMN) – operated by licensed mobile operators, Private 5G networks provide enhanced control, security, and reliability, specifically tailored to meet the specific needs of the organisation. However, it should be noted that these networks are not licensed to provide services to retail consumers outside of the designated building or campus.

We need to first appreciate that private networks provide dedicated and localised connectivity solutions for enterprises, industries, campuses, or smart cities. Unlike the cellular Public Land Mobile Network (PLMN) that private mobile operators with a license to provide public telecommunication service have, Private 5G networks offer enhanced control, security, and reliability, tailored to meet the specific needs of the organisation but are not licensed to provide service to any retail consumer outside the specified building or campus.

These networks are like Closed User Groups or CUGs and do not compete with licensed public telcos or encroach on the latter’s turf. A Private 5G network may be set up in any one of the following ways, as recommended by TRAI and approved by the Cabinet.

#1 Telecom Service Providers (TSPs) with Access Service License may provide private networks as a service to an enterprise by using network resources like network slicing over its PLMN public network.

#2 TSPs with Access Service License may establish isolated Captive Non-Public Network for the enterprises using the IMT spectrum acquired by them.

#3 Enterprises setting up Private Captive Networks may obtain the spectrum on lease from TSPs and establish their isolated network.

#4 Enterprises setting up Private Captive Networks may obtain the spectrum directly from DoT and establish their isolated network.

The process involves mobile operators, and direct spectrum allotment to enterprises is just one method among many for establishing a Private 5G network. This decision is fair, considering that private and public networks are not in direct competition since the spectrum is for use within the campus and business site. Moreover, as enterprises embrace Private 5G networks to enhance their digitalisation efforts, they would experience significant operational improvements. This would result in a greater need for external communication requirements, majorly benefitting the mobile operators.

Private mobile networks, initially introduced with 4G, are now experiencing substantial growth with the advent of 5G. These networks are enabling the development of new use cases in cutting-edge technologies such as decision-making, robotics, autonomous vehicles, connected machines, and various forms of video applications (virtual reality, augmented reality, digital twins, immersive gaming, and video surveillance). Industries such as ports, supply chains, warehouses, mining, healthcare, education, and manufacturing are among those reaping the benefits of 5G private networks.

THE USE CASES

Private 5G networks offer more than just internal communication. They facilitate a wide range of applications, enhancing efficiency through mission-critical wireless communication for vital infrastructure, business operations, and public safety. These networks also serve as the foundation for smart factories and production, providing producers with compelling advantages enabled by 5G technologies.

The refusal to allocate spectrum directly to captive private networks will inevitably slow down enterprise digitisation and hurt India’s GDP.

Supply chain management and logistics: Private 5G networks can enhance logistical processes by providing real-time asset tracking, inventory management, and tracking of goods. They can help with automated warehouse management, driverless cars, and improving the overall efficiency and visibility of the supply chain.

Smart grid: They play a crucial role in enhancing the security, stability, and operational effectiveness of electricity systems. By integrating information, communication, and control technology, smart grids can bring significant advancements to the infrastructure.

Smart cities and smart driving: Private 5G networks play a crucial role in the development of smart cities, enabling the implementation of intelligent infrastructure. These networks support a range of applications, such as smart grids, smart lighting, traffic management systems, and public safety solutions. These networks enable efficient urban services, enhance citizen safety, and support various IoT-based applications. Additionally, 5G networks can help make intelligent driving technology safer and more effective. It is anticipated that by 2025, fully autonomous vehicles will become prevalent on our roads.

Manufacturing and Industrial Automation: Private 5G networks can provide real-time monitoring and management of production operations, enhancing productivity, efficiency, and quality assurance. They make it easier to deploy systems using AI, robotics, and industrial automation. Predictive maintenance, remote troubleshooting, and machine-to-machine communication are all supported by these networks.

Healthcare: The potential for Private 5G networks in this sector is enormous. They can facilitate the delivery of high-definition medical imaging and video consultations, as well as telemedicine services, remote patient monitoring, and other functions. These networks can increase data exchange speed and reliability, which will improve operational effectiveness and patient care.

SETBACK TO DIGITAL INDIA PLANS

It is widely acknowledged that each enterprise possesses unique operational requirements and specific Service Level Agreements (SLAs) to meet. However, enterprises often face challenges in having their stringent SLAs fulfilled by mobile operators, whose networks and services are primarily optimised for general retail customers across various segments. Neither side is at fault, but this situation inevitably leads to the conclusion that it would be beneficial for enterprises to design and manage their own dedicated 5G networks. In the interest of fairness, it is justifiable to allocate the required spectrum directly to enterprises. This recommendation was also put forth by the country’s apex telecom regulator, TRAI, in its detailed recommendations to the government on 11 May 2022.

It is important to recognise that each enterprise has unique and specific requirements, even within the same industry category. For instance, the digitalisation needs of Maruti Udyog would differ from those of Toyota, Hero Honda, or any other company. Moreover, since the spectrum allocation is intended for a specific enterprise, application, or location, there would typically be only one interested party. Consequently, conducting an auction for this purpose would be irrelevant and pointless. As seen in other parts of the world, the most effective approach would be to administratively assign the spectrum directly to the respective applicant or enterprise. This was also part of the TRAI’s recommendations.

However, reports indicate that the Department of Telecommunications (DoT) has decided that enterprises should obtain spectrum only through leasing from telcos. This not only hampers aspiring companies like TCS, Infosys, GMR, and Larsen & Toubro, who are seeking government airwaves for the construction of 5G private networks but also poses a significant setback to India’s digitalisation efforts across various industries.

Experts argue that private networks operate under different dynamics, as network virtualisation and disaggregation have expanded the vendor ecosystem beyond traditional telecom players. This crowded marketplace includes operators, industrial players, hyperscalers, startups, system integrators, and equipment vendors, all vying to address this opportunity.

The refusal to allocate spectrum directly to captive private networks will inevitably slow down enterprise digitisation and hurt India’s GDP, according to a senior analyst at ABI Research.

The urgency for Private 5G networks cannot be overstated, especially for a country on the brink of digital transformation. The country is not prepared to wait indefinitely for telcos to deliver P5G networks when there is ample capacity and scale that can be utilised, particularly since the proposal has clear approval from the Union Cabinet. Shouldn’t the fundamental right of choice in optimising their business be granted to enterprises with pending applications for direct spectrum allocation?

India has a vast ecosystem of MSMEs and startups, many of whom would eagerly accelerate their growth through captive wireless networks. However, being smaller entities, they are likely observing the progress of current applicants from larger enterprises who are seeking spectrum from the government before considering their direct applications. Encouraging direct spectrum assignment to enterprises and other aspirants would likely lead to a surge in the availability of private 5G networks, catalysing India’s digitalisation. It is essential to support and facilitate this process rather than stifling it.

TV Ramachandran

The author is Hon. FIET (London) and President of Broadband India Forum.

Research inputs by Debashish Bhattacharya.

The views are personal.

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