Allowing IT companies to purchase 5G spectrum and build their own private network will hammer the pockets of Indian carriers wanting to spend big on the network.
With India preparing to hold 5G spectrum auctions, all eyes are on the Indian telecom operators that will compete for the prized 5G spectrum to launch their services in the nation. However, the Indian government has once again made life difficult for telecoms by giving private 5G networks to enterprises, allowing them to set up their own network base to conduct their operations.
This announcement has understandably surprised Airtel, Vi, and Jio, and analysts have speculated that it may depress demand for 5G spectrum during the auctions next month.
Giving the network to corporations implies that telecoms will lose a significant portion of their income potential. As a result, they may think twice about proceeding with their planned move during the 5G spectrum auctions.
“The new regulations will surely damage telcos’ 5G business case and decrease their demand for pricey C-band 5G spectrum in next month’s auction to roughly 40-50 units,” according to a source.
The government has provided firms with a cost-effective manner of delivering bandwidth for their operations by providing them with private 5G networks. Businesses will not be charged a licensing fee when the spectrum for their 5G network is allocated.
Most telecom organizations believe that in the early phases, 5G networks will be primarily implemented for business use cases.
And gradually migrate into the public consumer sector via the 5G network.
Loss of corporate business may dissuade telcos from investing heavily in spectrum auctions, since they are already dealing with decreasing revenues and need extra financial assistance (through 5G network to business) to continue their operations in the long run.
The 5G spectrum auctions are expected to take place on July 26 in India, and we’ll be watching closely to see if all of the telecoms meet their 5G commitments.
