5G implementation in private networks will require specialized and new technology which will be a greenfield area for both parties, they added.
5G is a predominantly business-to-business (B2B) technology and will first be used by businesses and enterprises.
Commercial deployment will take a few years at least and will likely be first deployed only in industrial areas, special economic and commercially important zones, said telecom expert Mahesh Uppal.
“I don’t expect to see circle-level 5G deployment right away. There is space for both telcos and non telcos on the table because at the end of the day both are deploying a new technology and will need to collaborate with different technology vendors for it,” Uppal said.
There could, however, be an opportunity to review the licensing model for all parties involved in the captive networks business, analysts said.
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“The challenge is that the current approach to private network business does not reconcile with the existing telecom licensing. Captive networks, by definition, are a subset of the services that telcos can provide, much like internet services. They need a proportionate licensing regime as the current process will not work,” Uppal said.
Experts also expect collaborations to take centre stage between telcos, tech players, systems integrators and hardware players as no single category of enterprise is equipped to implement the gamut of designing, building, managing captive 5G networks and deploying spectrum.
These are likely around product development, evolving software solutions, use cases, platforms and applications required to build captive smart factories.
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A tech company will not immediately have 5G network management skills, even as a telco would need to rely on IT players/systems integrators for software coding solutions and hardware vendors for deploying 5G sensors that are typically required in smart factories.
In fact, enterprises can combine the licensed (from telcos) and non-licensed (private) spectrum to develop even more robust networks for their local needs, said Ashutosh Sharma, VP-research director, Forrester.
“My understanding is that the Department of Telecommunication will follow a method similar to what was seen in Germany where such private spectrum was offered to enterprises and unsold spectrum was then returned to telcos for licensed usage. Large enterprises such as the Tatas,
Adanis, Aditya Birla Group and many more with remote sites can benefit from this,” Sharma said.
Spectrum in the 700 Mhz band, which has been recommended for 5G private network use, has been unclaimed for years because there are no commercially viable devices using that band, said another industry expert on condition of anonymity.
“Private networks will be like islands that need public telecom networks for connectivity with the outside world. So, no commercial telecom revenue will be hit. This is just an attempt by the telcos to prevent new players from entering the enterprise market,” the person added.
Broadband India Forum president TV Ramachandran said 4G captive networks have been around for a few years, but Indian telcos have not utilized the opportunity to set up campuses for the same.
“It is unfair to compare the spectrum play on potential revenue generation. Rather, we should consider how far it will improve efficiency for Indian businesses if implemented right,” he said on concerns of revenue loss cited by telecom operators.
“Telcos have traditionally depended on revenue from external communication, and not only will that revenue be protected but it will also grow through the business created by private networks. Telcos themselves outsource a lot of their network setup and implementation to enterprise vendors, so why can’t enterprises do it as well?” Ramachandran added.
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