TRAI recommends Private 5G for Enterprises

What has been recommended?

TRAI has recommended that "There is a need for introducing Captive Non-Public Network (CNPN) Provider Authorisation under Section 3(1)(b) of the Telecommunications Act, 2023 with the scope of establishing, maintaining, operating, and expanding CNPN networks for enterprises. In case the Central Government accepts this recommendation, it may seek the recommendations of TRAI on detailed terms and conditions for such an authorisation."

What does it mean?

Should these recommendations be accepted by the Indian Government, what would be it's implications for Private Enterprises, Telecom Service Providers, DoT and the general public.

What impact does the introduction of Captive Non-Public Network (CNPN) Provider Authorisation have on Private Enterprises?

The Telecom Regulatory Authority of India (TRAI) is said to be evaluating a proposal that would allow companies and businesses in India to set up their own private 5G networks. If this proposal is approved, it would enable large organizations in India to create private 5G networks at much lower costs, as they could obtain administrative spectrum directly from the government. This would enable private entities to build captive private 5G networks at costs around 40% less than using telecom operators' networks or leasing spectrum from them.

What impact does the introduction of Captive Non-Public Network (CNPN) Provider Authorisation have on Telecom Service Providers (TSPs)?

Telecom service providers such as Bharti Airtel, Reliance JIO, and Vodafone Idea have strongly opposed any proposals for the administrative allocation of spectrum. They argue that such measures create an uneven playing field, as they invest substantial amounts in acquiring spectrum through auctions. Additionally, there are national security concerns regarding the potential establishment of private networks by unlicensed entities. The enterprise segment of telecom companies, valued at approximately Rs.64,700 crore or 20% of their revenue, could be jeopardized if private companies are permitted to establish their own networks using administratively allocated bandwidth. Private networks have been identified as a significant 5G monetization opportunity for telecom service providers.

What impact does the introduction of Captive Non-Public Network (CNPN) Provider Authorisation have on Department of Telecommunications (DoT)?

Should the Government implement these recommendations, it may lead to a rise in private enterprises seeking approval to set up private 5G networks in India. At present, India has only 10 private 5G networks, in contrast to the United States, which has over 170, and China and Germany, which together have more than 50. According to VoICE, the global market for private LTE and 5G networks is projected to exceed $16 billion by 2026, while in India, it is expected to surpass ₹24,000 crore, with an annual growth rate of 40%. CNPN deployments are anticipated to benefit sectors such as Industry 4.0, railways, defense, CPWD, and metro systems.

What impact does the introduction of Captive Non-Public Network (CNPN) Provider Authorisation have on the general public?

Although it might seem at first that the introduction of Captive Non-Public Network (CNPN) Provider Authorization would not directly affect the general public, this is not the case.

This development could significantly decrease the Enterprise Sector income for Telecom Service Providers, which might result in higher tariffs for Telecom Services for the general public.

Furthermore, having a Private Network could allow enterprises to lower prices, as they could set up captive private 5G networks at costs around 40% less than using telecom operators' networks or leasing spectrum from them.