DoT sets out guidelines for controversial private networks

28 Jun 2022

The Department of Telecommunications (DoT) has published guidelines for the licensing and operation of private networks, referred to by the ministry as Captive Non-Public Networks (CNPNs), which India’s cellcos have argued risk undermining the business model for 5G services by eliminating one of the most potentially lucrative areas for revenue generation. The DoT claims that allowing companies to establish their own CNPNs will support the development of new use cases for 5G in industries such as manufacturing, construction, healthcare and transportation. The nation’s service providers have argued against the move, however, as the provision of industrial 5G services represents a substantial source of potential revenue for cellcos, without which they might not be able to invest as heavily in the acquisition of necessary spectrum resources or the construction of widespread networks for use by the consumer market. Of particular concern to the operators is the fact that enterprises have been given the opportunity to receive spectrum directly from the DoT, without having to spend vast sums to purchase the frequency rights through competitive auctions. The Economic Times quotes an unnamed senior official at one of the nation’s cellcos as saying: ‘the government has paved the way for administrative allocation of 5G spectrum to large tech companies who can easily meet the INR1 billion (USD12.8 million) net-worth criteria, which is extremely unfair as it expects telcos, on the contrary, to buy these coveted airwaves by splurging billions in the upcoming auction.’

The DoT’s new guidelines permit enterprises to establish CNPNs in four ways: telecom service providers (TSPs) may provide CNPNs as a service to enterprises using network resources over public networks (such as through network slicing); TSPs may establish CNPNs for enterprises using spectrum that they have acquired; enterprises may lease spectrum from TSPs to establish their own CNPNs; or enterprises may obtain spectrum directly from the DoT to establish their own CNPNs. The DoT has published amendments to the Unified Licence (UL) and Unified Access Service Licence (UASL) that cover the provision of CNPNs and the leasing of spectrum to enterprises. For enterprises to establish their own CNPNs, meanwhile, the DoT’s guidelines specify that the company must apply for a CNPN licence and have a net worth of at least INR1 billion. The ten-year CNPN licence is valid for a specific geographic location and may not be used for the provision of a commercial telecommunication service, nor may it be connected to public networks although the licensee may connect CNPNs at different locations through leased lines obtained from TSPs. Companies will not be required to pay an entry fee or licence fee for the CNPN licence but will be required to pay an application fee of INR50,000. Regarding the assignment of spectrum to CNPN licensees, the rules state that the DoT will undertake demand studies and then see recommendations from the Telecom Regulatory Authority of India (TRAI) for such allocations. Licensees will be required to obtain clearance from the Standing Advisory Committee on Frequency Allocation (SACFA) and will be responsible for ensuring that signals are restricted to indoor areas or within the specified geographical area and the network does not cause harmful interference to other spectrum users.

The DoT’s decision to move forward with the licensing for CNPNs is expected to negatively impact bidding in the upcoming 5G spectrum auction, set to take place late next month. As previously reported by CommsUpdate, the tender will feature spectrum in the 600MHz, 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 3300MHz and 26GHz bands.