Tech companies have to wait for direct allocation of 5G spectrum

Technology companies, planning to use the allotted 5G spectrum to develop in-house non-public networks (NPN), would now have to wait as the government was seeking legal advice regarding the finer details of direct allotment.

“Direct assignment is very complex because we must see the legality and demand in India. Even globally, a very small and niche area is set aside for NPNs,” a senior government official told Economic Times.

On Monday, the government completed the auction of 5G spectrum with up to 71 per cent of the spectrum offered across 10 bands—that is 51,236 MHz of the offered 72,098 MHz-0-being sold. After the completion of the auctions, Union minister for electronics, IT and communications Ashwini Vaishnaw, however, had clarified that direct allocation of 5G airwaves to tech companies needed a detailed study before implementation, a report in the Economic Times said.

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Another government official had told the publication that in terms of application, ecosystem or demand, “there was very little to justify the high costs associated with NPNs.”

According to the Department of Telecommunication, companies may establish their indoor or captive and isolated NPN for their own use and cannot be used to provide commercial telecom services.

Government officials also told the news outlet that the enterprises that wanted to set up an NPN in near future could do so by leasing a spectrum from a telecom service provide—which was an option available to them earlier as well.

For setting up captive NPNs, the Department of Technology had, in June, released a few guidelines. One of the rules was that the companies seeking direct allotment of spectrum under the captive route should have a minimum net worth of Rs 100 crore.

A separate rule by the Department of Telecommunications stated that though the applicant would not have to pay entry or licence fee, it must be registered as an Indian company under the Companies Act.

However, in the same month, the Broadband India Forum had stated that “vested interests” were putting out “misleading and misinformed claims” that companies “would get backdoor entry to provide enterprise 5G solutions without licence fees for airwave allotment”.

Tata Consultancy Services’ chief operating officer N Ganapathy Subramaniam, too, had told the Economic Times that private networks would enable Indian organisations to boost their digital agenda.