5G
No business case for rollout of 5G networks, says COAI
Reacting to a media report that DoT is considering revising its proposal on allowing enterprises to build their own 5G private networks for captive feeds, and the revised proposal will have the provision that the government can directly allocate spectrum to enterprises to build such networks, COAI has sought intervention from Ashwini Vasihnaw, Minister for Communications, with copies to PD Vaghela, Chairman TRAI, K. Rajaraman, IAS, Secretary DoT, A.K. Tiwari, Member (T), DCC, Dilip Padhye, Member (F), DCC, DoT, and Nizamul Haq, Member (S), DCC, DoT.
“There will be no business case for rollout of 5G networks then,” says COAI. “Worldwide it has been seen statistically that wherever 5G has been rolled out, there is hardly any consequent revenue increment from the retail segment. The revenue and efficiency enhancement can happen only from the Enterprise segment.
The needs of voice and data of the entire nation is being adequately met by the TSPs through their 4G networks today, argues the association. As such the revenues of TSPs are not going to increase from the retail segment despite very heavy capital investments for rollout of 5G networks. This is further accentuated because India is a highly price sensitive market especially in the consumer segment.
The new segment that would be benefitted by 5G services of the TSPs is the enterprise segment including manufacturing, logistics, education, hospitals, campuses, factories, etc. The telcos have also conducted successful 5G trials for many of these use cases in the last one year. With 5G auction, the TSPs are targeting the enterprise segment for revenue enhancement and overall increase in productivity and efficiency. This is where TSPs 5G business case lies.
If private captive networks for enterprises are set up independently by other entities then this would mean dramatically altering the industry dynamics and hurting the financial health of the industry and will strike at the very heart of the business case.
If independent entities set up private captive networks with direct 5G spectrum allotment by DoT, the business case of TSPs will get severely degraded. This will diminish the revenue so much that there will be no viable business case left for the TSPs and there will not remain any need for 5G Networks rollout by TSPs.”
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