According to reports, the latest government regulations will allow large tech companies to set up parallel pan-India captive 5G networks, bypassing telecom carriers, would dampen demand for critical C-band (3.3-3.6 GHz) airwaves in the upcoming 5G auction.

The new rules for captive private network rollout would degrade the business case for carriers to invest strongly in airwaves and next-generation mobile broadband network deployments, as per reports.

Reports suggest that, the new rules would definitely hit the 5G business case of telcos and reduce their appetite for expensive C-band 5G spectrum in next month’s auction to around 40-50 units.

The Department of Telecommunications’ decision to undertake demand studies and then seek recommendations from the sector regulator could severely delay direct spectrum assignments to enterprises and give telcos a first-mover advantage in the captive 5G networks game.

According to reports the telecoms are not happy with the DoT’s decision not to charge enterprises any licence/entry fees for direct spectrum allotments to set up captive 5G networks to connect their facilities across the country, and instead levy a nominal processing fee of Rs. 50,000.

T V Ramachandran, president, Broadband India Forum (BIF) says, “DoT’s decision to undertake demand studies and then seek Trai’s recommendations is a smart way of completely delaying this option. Enterprises and Industry 4.0 have clearly lost out as there is no time-frame either for the DoT study or the regulator's recommendations on this matter.”

According to reports, private captive 5G network rollout would pose B2B monetization risks for telcos. If enterprises acquire private spectrum directly, they would not leverage the airwave holdings of operators, and this could lead to loss of revenue generation opportunity for telcos.