DoT’s dismissal of TRAI views on private networks to slow enterprise digitisation, lower GDP: Report

The Department of Telecommunications (DoT)’s dismissal of the telecom regulator (TRAI)’s recommendations on setting aside licensed spectrum for captive private networks will lead to a slowdown in enterprise digitisation and result in lower GDP in India, according to a senior analyst at ABI Research.

By contrast, the number of private networks is growing particularly strongly in national markets that have dedicated spectrum for licenses or shared spectrum.

“This will inevitably have a slow-down effect on enterprise digitization and transformation in the country, ultimately leading to lower economic performance and a lower GDP,” said Leo Gergs, Senior Analyst for 5G Markets at ABI Research on Thursday.

ET in its May 26 edition reported that the telecom department believes that it won’t be feasible to directly allot spectrum to enterprises for private networks under the present legal framework.

Indian telcos have been vehemently opposing any direct allocation of airwaves, alleging that it will distort the level playing field and open backdoor entry for technology companies to provide 5G services to enterprises. Tech companies, on the other hand, want spectrum directly from the government for setting up captive networks, saying enterprises should not need to depend on telcos.

ABI Research said there were over 1,000 private cellular networks for enterprises globally in May, representing a significant increase compared to the last year. But it has cautioned that restrictive spectrum allocations and hesitancy in telcos pose threats to the future growth of private networks.

Gergs said that the constantly growing number of private cellular networks indicates that there is still a high interest in connectivity technology, which is still perceived as relatively new.

As per ABI Research, the number of private networks is growing particularly strong in the national markets with dedicated spectrum arrangements for licensed or shared spectrum.

“Spectrum regulations need to look at what is really happening as enterprises often have multiple sites in different countries – or even continents. And they are unwilling to look for separate connectivity solutions for each site,” Gergs said.

The recent initiatives by the European Commission suggest its member states to reserve spectrum between 3.8GHz to 4.2GHz is an “important example for other regions to follows”, he said, adding that since French regulator ARCEP opened the 3.8GHz spectrum like its German neighbour, the uptake numbers have increased.

“The telco industry urgently needs to deliver on promises made to the enterprise community now. Otherwise, enterprise 5G will enter the history books as the technology that always overpromised and underdelivered,” the analyst said.

He added that for cellular networks, a business needs “easy access” to licensed spectrum. “Otherwise, they are forced to go through traditional network operators who struggle to adjust their value proposition to enterprise requirements. Moreover, enterprises do not trust them – particularly in industrial environments – to deal with OT data,” he said.