NEW DELHI : Telecom operators have asked the department of telecommunications to ensure that captive 5G networks abide by all rules and regulations concerning quality of service, security, enable lawful interception by enforcement agencies among others, while remaining completely isolated from commercial networks and are set up only by end-user enterprises instead of intermediaries and system integrators.

In a letter to telecom minister Ashwini Vaishnaw and telecom secretary K. Rajaraman, the Cellular Operators Association of India (COAI), which represents all the operators including Reliance Jio, Bharti Airtel and Vodafone Idea, has opposed captive networks as permitted in a government notice inviting applications (NIA) while announcing the auctions.

The communication comes close on the heels of tech companies seeking access to 5G airwaves through direct allocation, that is without participating in the auctions.

The operators have laid down nearly two-dozen conditions that captive networks should comply with so that same-service-same-rules principles are applied to ensure a level playing field, in their first official response to the NIA that laid down guidelines of the spectrum auctions, stating that third parties wanting to set up 5G captive networks should take spectrum through auctions, the same way as telcos.

“We reiterate that all the steps listed by us are aimed at ensuring orderly growth of the sector and maintain investors‘ confidence. Any guidelines for setting up captive non-public network (CNPN) by obtaining spectrum directly from the department of telecommunications (DoT) should be issued only after a demand study by DoT and subsequent recommendations of the Telecom Regulatory Authority of India," the association said in the letter sent on Saturday, a copy of which was seen by Mint.

Telcos have said that captive networks should not be permitted on 2G, 3G or 4G technologies and should be assigned spectrum only in the non- International Mobile Telecommunications (IMT) bands. “The allocation of IMT band spectrum to CNPN is likely to fetch minuscule revenue compared to auction of such spectrum for public networks," said the letter.

Every network element for CNPN should comply with the requirements of trusted product or trusted source set by the government, the association said. Any equipment should be installed only after obtaining approval from the National Security Council Secretariat, it said.

“Given the geopolitical and cybersecurity risks and to mitigate national security concerns, CNPNs should be permitted only after installing lawful interception equipment and providing connectivity to law enforcement agencies," the association said.

Further, CNPNs set-up using dedicated spectrum must store call or data records for two years, command logs for three years, keep records of software updates, ensure data localization, and allow remote access only from within the country and not allow remote access outside of India, COAI said. Similar conditions were put for non-captive networks, it said.

Use cases meant for masses cannot be part of CNPN, the telcos said, and sought revenues earned by service providers from provision of captive network to be exempted from payment of licence fee and goods and service tax.

COAI highlighted that the economic impact of captive 5G networks was marginal as per some international benchmarks even when the cost of spectrum set aside for the services was significant.

It cited an assessment of economic impact by Compass Lexicon on Germany keeping aside commercial spectrum for local private networks, which found that 100 MHz set aside by the government could cause consumers welfare loss around €6.2 - €15.6 billion, while consumers may suffer from a significant degradation in quality of service. “Public network operators paid €2.2 billion extra in the German auction, money that could have been used for faster and more extensive deployment of 5G," COAI said, while noting that reduction in capability of public mobile networks will have ripple effect on the wider economy.

“Taking away chunks of crucial spectrum to dedicate them to verticals runs the serious risk of fragmenting the available spectrum (reducing spectrum’s carrying capacity) and threatens the wider success of 5G and Digital India and can also pose a threat to national security," it said.

The telcos said the scope of CNPN should be restricted to machine-to-machine communication inside well-defined premises and plant automation. Enterprises owning such networks should ensure they do not cause any interference to any public network or network of licensed telecom operators, comply with electromotive force norms set by DoT.