Private telcos raise red flag on direct enterprise spectrum allocation; warn of security threats, revenue loss

COAI further flagged potential losses to the national exchequer, noting that spectrum auctions in 2022 alone generated Rs 1.5 lakh crore.

The Cellular Operators Association of India (COAI) has urged the government to rule out direct spectrum allocation to enterprises, arguing that private 5G networks should only be deployed through licensed telecom service providers (TSPs) via spectrum leasing or network slicing.

COAI said global comparisons with countries like the US, Finland, Germany, and the UK were misleading, as private networks in those markets are typically located in remote or underserved areas.

"While some industry bodies have, in their interests, drawn parallels with countries such as the US, Finland, Germany, UK, etc., where private networks have been deployed, this comparison ignores a crucial contextual difference of such industries being located in remote or geographically secluded areas with limited public network coverage. In India, however, most industrial corridors and enterprise zones are already well-served by telecom operators, thereby leaving no coverage deficit," S.P. Kochhar, Director General, COAI, said in a statement.

The industry body stressed that setting up independent private networks is neither cheaper nor more efficient for enterprises, calling such claims “misleading.”

According to COAI, such deployments require heavy capital investment in equipment, spectrum management, security, network upkeep, and skilled manpower—capabilities that most enterprises lack. Telcos, it argued, are better equipped to handle long-term operations, continuous upgrades, and evolving technology standards.

It also warned of technical challenges, including radio frequency spillover from private networks into public telecom infrastructure, which could cause interference and compromise service quality. Licensed TSPs, it said, are best positioned to prevent and manage such risks.

COAI further flagged potential losses to the national exchequer, noting that spectrum auctions in 2022 alone generated Rs 1.5 lakh crore. Allowing direct enterprise allocation, it said, would create an uneven playing field, giving private players infrastructure benefits without equivalent regulatory or financial obligations.

Most importantly, COAI raised red flags over security risks, warning that private networks run by unlicensed or foreign entities could bypass critical compliance, interception, and traceability rules, weakening India’s cyber defence and surveillance capabilities.

“The future of India’s digital economy must be built on secure, inclusive, and accountable networks,” said Kochhar, adding that licensed telecom service providers stand ready to deliver enterprise-grade 5G under proper regulatory oversight.

COAI’s remarks come after the Department of Telecommunications (DoT) issued a memorandum on June 30, initiating a fresh assessment of spectrum demand for captive non-public networks (CNPNs), also referred to as 5G private networks.

This marks the second such exercise since June 2022, when the DoT first introduced provisions for setting up private 5G networks.

“The Department has decided to assess a fresh demand for spectrum in various prospective frequency bands and carry out a demand survey, through the Saral Sanchar portal, to identify the prospective frequency bands for the direct assignment of spectrum for CNPN-based services,” the memorandum stated.

Under current rules, CNPN providers can either lease spectrum from licensed telecom operators or obtain it directly from the DoT.

These DoT guidelines come after, in February this year, the Telecom Regulatory Authority of India (TRAI) recommended that the government introduce a CNPN service provider authorisation under the Telecommunication Act, 2023.

COAI represents Reliance Jio, Bharti Airtel and Vodafone Idea.

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