The Department of Telecommunications (DoT) is set to establish guidelines for the leasing of spectrum to captive private networks, presenting a new revenue avenue for telecom operators, especially in the context of 5G monetization. This move will enable telcos, which have acquired spectrum through auctions, to lease airwaves to captive non-public networks (CNPN) or private networks. The revenue generated through such leases will be included in the operators’ gross revenue, a crucial factor for determining license fees and spectrum usage charges. Officials have confirmed the finalization of guidelines, with an imminent notification of the rules.
Given the challenges in monetizing 5G, primarily due to limited demand for enterprise use cases, this initiative is seen as a significant step. While retail customers have been accessing 5G at minimal costs since its launch in October 2022, leasing 5G spectrum to private networks could offer a solution. This strategy is expected to benefit Reliance Jio and Bharti Airtel, both of which are progressing towards completing the nationwide rollout of 5G services in the current year. The leasing option provides an opportunity to capitalize on the capabilities of fifth-generation mobile technology, which is substantially faster than 4G.
According to the prepared rules by DoT, private network operators can secure spectrum from one or more telecom firms through mutually agreed terms based on their specific requirements. The direct allocation of spectrum to enterprises has been a subject of contention, causing a divide between technology firms and telecom operators. Telcos have opposed direct allocation, claiming it could distort the level playing field and grant technology players indirect entry to offer 5G services to enterprises. Meanwhile, technology companies argue for direct spectrum allocation from the government to establish captive networks, asserting their independence from telcos.
