Private networks are becoming an important revenue generator for mobile operators in India, even more than elsewhere, in a country stuck with chronically low ARPUs. This is even more true than ever now as the country’s 5G infrastructure deployment gets underway following the spectrum auctions completed in early August 2022.
That is why the operators have been lobbying hard to prevent enterprises being granted their own spectrum after regulator TRAI had proposed allowing them to set up their own private 5G networks. That was shortly before the auction and prompted mobile operators to argue this could seriously jeopardize their 5G business case given the amount they would have to spend on 5G spectrum, as they did.
The government though was concerned in turn that denying enterprises the opportunity to build their own networks with dedicated spectrum might impede development of the private 5G market in India and more widely damage the country’s ambitions to become a major manufacturing power under the Make in India campaign. It had been noted in India that some major manufacturers in Japan, South Korea, Germany, the UK and the USA in particular were moving ahead with industrial applications exploiting robust wireless communications at high bit-rates and low latencies on the back of early private 5G investments.
In those countries, enterprises have been pioneers of private networking ahead of the MNOs, often with help from systems integrators and equipment makers themselves, especially Nokia. This has been led not just by major manufacturing and engineering firms, the likes of Bosch in Germany, but also by large mining companies, in many cases upgrading from existing WiFi networks, which were too instable and prone to interference, as well as failing to provide adequate performance ahead of the latest generation WiFi 6/6E.
LTE had emerged a superior alternative to WiFi even before 5G in some cases, with spectrum obtained either by leasing from an MNO or obtaining unused frequencies from regulators, before dedicated allocations for enterprises became available. But it has seemed that access to dedicated spectrum opened the door to effective enterprise wireless connectivity at a time network slicing was not yet ready to deliver comparable capabilities within the public network infrastructure.
With India being late into 5G compared with other large markets, operators had time to prepare their private 5G strategies and campaigns after observing developments elsewhere. They had been seeking collaborations with key industrial players, Bharti Airtel for example announcing a strategic partnership with Tata for developing 5G public and private networks in June 2021.
Tata had developed a state-of-the-art Open RAN-based radio and core for both 5G Standalone (SA) and Non-Standalone (NSA) with its own software stack, becoming available for commercial development in January 2022. Tata was positioned as systems integrator, with Airtel’s role being to pilot this indigenous Indian package as part of its larger 5G roll-out.
Since then though, Tata has been setting out its own stall for private 5G without direct involvement of operators. Its former state-owned service provider and infrastructure owner subsidiary Tata Communications in October 2022 launched a dedicated private 5G global center of excellence (CoE) in Pune, focused on applications and capabilities in automotive, metals, mining, airports and seaports, manufacturing, logistics and healthcare.
This center has already conducted trials of private 5G use cases including use of video and image analytics for automated inspection of parts, inventory management, asset tracking, warehouse theft detection, AR/VR-based remote worker collaboration and video-powered retail purchasing. A key part of this program is interoperability testing for compatibility of Tata’s own private network with devices and monitoring for stable connectivity. The clear aim is to position Tata itself as a key provider of private 5G enterprise technology not just in India but elsewhere.
Furthermore, Tata Communications has confirmed it is currently in discussions with over 40 enterprises from different verticals about providing private 5G networks. Over 20 companies have meanwhile applied for 5G spectrum, not all indigenous to India, including Infosys, Capgemini, GMR, and Larsen & Toubro, as well as Tata Communications itself.
These applications were submitted without any guarantee spectrum would be available at this stage, in response to the Department of Telecommunications (DoT)’s invitation to assess demand. At present, the only option for enterprises is to lease spectrum from one of the telcos if they want to establish a private network.
Given the DoT’s idea was to determine demand in consultation with the TRAI over details such as possible pricing, this response must make it more likely it will decide to allocate some spectrum directly to enterprises.
It is not surprising then that the operators have grown increasingly concerned over recent developments. This has prompted some senior executives to speak out, with The Economic Times recently reporting comments from directors of Reliance Jio and Vodafone Idea.
“We think that telcos are the best suited because we have mastered the art and the science of planning,” Rochak Kapur, head of enterprise products and business operations at Vodafone Idea, said. “And it’s not just spectrum planning, it’s complete radio planning or core planning and the lifecycle management of the device or the subscriber ecosystem.”
Similar sentiments emanated from Salil Khanna, head of enterprise and government business at Reliance Jio. He argued that enterprises should focus on their core activities and leave the rest to experts in the relevant areas. “I think running a telecom network is not going to be core for any of them,” he said.
He may not have heard the argument that telecoms had become too important to be left to telcos alone in the 5G era. It is certainly true that telcos will fail to capture a significant share of private 5G unless they extend their expertise into the relevant vertical sectors, even if this is done by assembling relevant partners into some sort of coalition.