India set to allow telcos to lease spectrum for private networks

This move by the government of India will allow domestic telcos to secure additional sources of revenue

India’s Department of Telecom (DoT) will soon announce the rules around the leasing of mobile spectrum by local carriers to companies willing to deploy private networks, paving the way for telcos to secure additional sources of revenues, according to local newspaper The Economic Times.

Enterprises in India are allowed to get spectrum from a telecom operator for setting up private networks.

The report stated that the revenues that will be generated by an operator by leasing 5G spectrum will be counted in the gross revenue of the carrier, meaning that it will be subject to dues for license fees.

Local carriers Reliance Jio Infocomm and Bharti Airtel have rolled out 5G in most of the country and they will be able to lease spectrum to enterprises for setting up private networks. Under current regulations, local operators can also directly set up the private network for an enterprise.

The report also noted that local telcos will have to notify the Indian government each time they lease spectrum to a company that holds a private network license. Also, the company that will operate the private network will have to get the approval from the standing advisory committee on frequency allocation (SAFCA) before starting operations.

The potential direct allocation of spectrum to enterprises for the deployment of private networks has been a source of tension between technology firms and telecom operators in India.

The Cellular Operators Association of India (COAI) had told the Indian government that local carriers will not have incentives to deploy 5G networks if authorities allow private companies to run their own private 5G networks.

The COAI, which has local operators Bharti Airtel, Reliance Jio and Vodafone Idea as some of its key members, had previously sent a letter to India’s Communications Minister Ashwini Vaishnaw stating that there is “no business case for the roll out of 5G networks” if the government finally approved the possibility for local enterprises to deploy and operate their own 5G networks.

Finnish vendor Nokia expected a rapid increase in the adoption of private 5G networks in India from the second half of 2024, according to previous press reports.

“You will see some early adopters this year, and then I think by the second half of 2024, there will be a big growth in the enterprises,” Sanjay Malik, head of the India market for Nokia, had said.