Telcos seek level-playing field with private network operators

Following the Cabinet’s decision to allow non-telecom operators to provide 5G private network services, mobile service providers, including Reliance Jio, Bharti Airtel, and Vodafone Idea, have asked the government to ensure that a level-playing field is maintained between the incumbents and new entrants in terms of licence fees and meeting other regulatory conditions.

“Same Service Same Rule should be followed to ensure investor’s confidence and continuous investments in the sector for roll-out of the future telecommunication networks. Otherwise, no investor will invest in a taxed portfolio when the same investment can be made without any tax burden through Captive Non Public Network (CNPN) route,” the telecom operators said through their industry association, the Cellular Operations Association of India (COAI), in a letter to the Department of Telecommunications.

The copy of the letter, reviewed by BusinessLine, has also been marked to the Prime Minister’s Office and the Telecom Regulatory Authority of India. Telecom operators annually pay the government 8 per cent of their revenue in the form of license fees in addition to GST payments. In addition, COAI has asked that private networks adhere to the service quality norms and meet law enforcement requirements as applicable to telecom operators.

Last week the Cabinet allowed non-telecom companies and institutions to own spectrum and run private networks despite vociferous objections raised by the incumbent operators, including Reliance Jio and Airtel. According to the telecom companies, there is no justification for allowing other players to set up private networks. They claimed that telecom operators “are fully capable of providing all customized solutions including M2M/Industrial 4.0 services in the most competitive and economic manner. It seems the decision on CNPN has been taken by the Government based on certain misquoted international practices,” the COAI said. On the other hand, tech companies, including Tata Consultancy Services and Cisco, see a big opportunity to enter the 5G space through private network solutions.

Long regulatory battle ahead

While big tech has won the initial victory by getting the Cabinet’s nod, these companies have a lengthy regulatory battle ahead of them, with telecom operators likely to provide opposition with every step. For instance, COAI has urged DoT not to allocate spectrum earmarked for public 4G and 5G services to private network operators. “Telecom operators are already starved of the spectrum to meet the ever increasing demand of high-speed data to support various use cases. As the spectrum allocated for CNPN cannot be used for Terrestrial/satellite broadband network leading to sub-optimal use of the precious national resource,” the industry body said.

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