In the pre-5G era, last mile connectivity — that is, from the cellular towers to end-user devices — was exclusively provided by mobile network operators (MNOs). Even in landline, the Wi-Fi connectivity to wired broadband was provided by the telecom operators. Large enterprises supplemented the MNO services by constructing their own campus Wi-Fi networks.

The 5G microcellular deployments have been changing the competition landscape. The 5G technology enables high capacity broadband communication (enhanced Mobile Broad Band — eMBB) or Ultra Reliable Low Latency Communication (URLLC) for industry automation, in a contiguous local area. This area could be indoors or include the adjacent outdoors. The network might be private and for use by a single enterprise such as in a factory or on a corporate or university campus, also referred to as Captive Non-Public Networks (CNPNs).

These networks are typically deployed by entities other than MNOs, such as network equipment manufacturers, tower companies and Wi-Fi gear providers to name a few, Examples include: Bosch setting up private 5G networks in about 250 of its locations in partnership with Nokia; Volkswagen constructing its own “5G island” in its manufacturing plant in Dresden, Germany (Volkswagen, 2022). Recently, GE healthcare in India has shown interest in a 5G innovation centre.

There are various reasons for enterprises to construct their own private networks, which include increased security, lower latency and congestion, greater network control, leveraging existing campus infrastructure such as indoor Wi-Fi networks, and so on. Such networks are possible in 5G due to the increased availability of high-performance, low-cost network equipment with software that assists self-configuration.

These private networks can also be shared for public use either within the campus itself or in adjacent outdoor areas. This complementarity of a private network for public use has enabled the formation of “neutral hosts”. A neutral host company provides wholesale infrastructure sharing services through a digital platform to the downstream-markets, enabling customers take advantage of economies of scale and scope of local networks.

Further, the radio network slicing and network function virtualisation as part of the 5G network architecture enable the neutral hosts to apportion bandwidth across public and private networks with associated quality of service requirements. This is a paradigm shift from what we have been witnessing prior to 5G. For example, until now, the MNOs share their network elements partially or fully with the Mobile Virtual Network Operators (MVNOs) to provide service.

In landline, Local Loop Unbundling (LLU) is the methodology for sharing the network elements ranging from passive copper wire/optic fires to bandwidth by the MNOs to other Internet service providers. Unfortunately, both MVNOs and LLU have not been successful in many countries due to various economic reasons.

However, in the case of neutral hosts, the local infrastructure built by non-MNOs can possibly be shared with the MNOs to provide services. Earlier form of neutral hosts were tower companies such as American Tower Corporation or Indus Towers that leased their passive tower infrastructure to multiple MNOs.

However, in 5G, the sharing of the network elements by the neutral hosts to MNOs can range from passive infrastructure to network slicing, and even spectrum sharing. The MNOs, on the other hand, also benefit without substantial sunk cost in infrastructure deployment in local areas.

Looking ahead

Apart from neutral hosts providing CNPNs, 5G Public Private Partnership Projects (5GPPP) and European Commission Horizon 2020 (H2020) initiatives have also embraced the 5G-enabled neutral host framework for real-world deployments in three European cities: Barcelona in Spain, Bristol in UK, and Lucca in Italy.

These developments lead us to ask the following questions: (i) Should the neutral hosts be licensed? And if so, what should be the granularity of the local area for licensing? (ii) What is the methodology for allocating spectrum to neutral hosts? and (iii) What should be the regulatory levies to be applied to neutral hosts? Should there be level-playing field between MNOs and neutral hosts?

The Department of Telecommunications guidelines, dated June 27, 2022, on CNPNs have not provisioned for the possibility of neutral hosts. As per these guidelines, the CNPNs can only be private networks and cannot be connected to any public network including the Internet. Take, for example, Mundra port in Gujarat, wherein the Adani Group wants to establish its 5G CNPNs. The investment in this 5G network will be optimal if a neutral host operates the CNPN as well as shares its network with the MNOs for public use by those in the port and adjacent areas. By restricting CNPNs from being interconnected with public networks, the economic viability of CNPNs becomes questionable.

The guidelines should be augmented for incorporating neutral hosts in the equation. Neutral hosts bring in new dimensions of competition in the telecom sector, benefiting in the process both the business and retail customers.

The writers are Professors at IIIT Bangalore and MDI Gurgaon, respectively

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