DoT’s good news for Airtel and Reliance Jio may be ‘bad news’ for Infosys, GMR and others

The Department of Telecommunications (DoT) has reportedly made a decision not to directly allocate spectrum to enterprises for captive private networks. According to a report in Economic Times (ET), companies such as Infosys, Larsen & Toubro, Tata Power, GMR, and others will not receive 5G spectrum for private networks. These companies have been requesting airwave allocation without auctions, a demand that has been strongly opposed by telecom companies Airtel and Reliance Jio. Indian telecom companies have been lobbying against the direct allocation of 5G spectrum to companies.

The DoT believes that it is not feasible to directly assign spectrum to enterprises for private networks under the current legal framework. This aligns with the advice of the attorney general R Venkataramani, who supports auctions. An official told ET that if an enterprise wants to implement its own network, it can do so by utilizing the options already provided by the DoT, including leasing spectrum from telecom operators.

The DoT will reportedly inform the cabinet and the Telecom Regulatory Authority of India (Trai) about its decision. Interestingly, this contradicts the initial guidelines on private networks issued by the DoT in 2022.

The issue of directly allocating 5G spectrum to enterprises has sparked controversy between technology companies and telecom service providers in the country. Telecom companies oppose direct allocation, arguing that it would create an unfair playing field and allow technology players to provide 5G services to enterprises through a backdoor entry. On the other hand, tech companies want spectrum directly from the government to establish their own networks, asserting that enterprises should not have to rely on telecom companies.

In response to the opposition from telecom companies, the DoT sought the opinion of the attorney general (AG). The AG reportedly stated that auctions are the preferred method of allotting natural resources like spectrum. He further mentioned that even if the government takes a stance on the classification of spectrum and argues that a certain bandwidth does not need to be auctioned, there could be potential issues raised later, similar to what happened in the 2G case. This may have prompted the DoT to reconsider the option of direct allocation.