• 5G
• September 20, 2024

Addressing the Lag in Captive Non-Public Networks (CNPN) in India

India’s 5G deployment journey started with remarkable speed. In just months after its spectrum auction, several telecom service providers (TSPs) launched commercial 5G services, putting India among the fastest adopters of 5G globally. However, while public 5G services have scaled rapidly, the deployment of Captive Non-Public Networks (CNPN), a vital part of the 5G ecosystem designed for private enterprise use, has been surprisingly slow. CNPNs are essential for industries like manufacturing, logistics, and smart cities to leverage the full potential of 5G for innovations such as the Internet of Things (IoT), automation, and real- time analytics. Despite the critical role these networks play in enhancing industrial productivity, the number of CNPN licenses issued in India has been very low. This slow adoption is a cause for concern as it limits the full scope of 5G’s impact on India’s industrial sector.

Current Status of CNPN in India

The Department of Telecommunications (DoT) issued guidelines for CNPN licenses in mid-2022, offering enterprises the option to set up their own private 5G networks. These networks can be established either by leasing spectrum from telecom service providers or by directly acquiring spectrum from the government. The guidelines also set a high eligibility bar, requiring companies to have a net worth of at least ₹100 crore to apply for direct spectrum allocation. Despite this framework, the uptake of CNPN licenses has been underwhelming. The complexity of the application process, high costs, and limited awareness among enterprises are significant roadblocks to CNPN adoption.

Why Is Adoption So Low?
1. Eligibility Barriers: The requirement of a high net worth for spectrum acquisition excludes many small and medium-sized enterprises (SMEs) from setting up their private 5G networks. These businesses, despite being key drivers of innovation, are left out of the CNPN framework, limiting their ability to benefit from 5G’s capabilities.

2. High Spectrum Costs: The price of spectrum has proven to be a significant deterrent, even for large enterprises that might consider leasing spectrum from TSPs. High upfront and recurring costs make it financially unfeasible for many companies to deploy CNPNs, especially in industries with tight margins.

3. Awareness and Complexity: Many companies remain unaware of the potential advantages of setting up private networks, or they find the regulatory framework too complex. This lack of clarity on both the application process and the potential benefits further reduces interest in adopting CNPNs.

Our Recommendations

To increase the adoption of CNPNs and ensure that India’s industries are able to fully capitalize on 5G, the DoT needs to consider a few key actions:

1. Simplifying the Licensing Process: Streamlining the application process will encourage more enterprises, especially SMEs, to apply for CNPN licenses. A user-friendly, digital-first approach, with reduced bureaucratic overhead, will help ease the entry barriers.

2. Introducing Flexible Eligibility Criteria for SMEs: The current high net worth requirement should be re-evaluated, and the government could introduce a tiered system for smaller enterprises. This will allow a broader range of businesses to apply for licenses and access the benefits of private 5G networks.

3. Subsidising Spectrum for Strategic Industries: The government should consider subsidizing the cost of spectrum for industries like healthcare, manufacturing, and agriculture, where CNPNs could lead to significant productivity gains. Lowering spectrum costs will encourage more companies to adopt these networks.

4. Increasing Awareness and Providing Support: The DoT could launch awareness campaigns in collaboration with industry associations and telecom companies to educate enterprises on the benefits of CNPNs. Events like the India Mobile Congress are a great place to achieve this. Offering technical support and consultation services will also help companies navigate the complex licensing process.

Conclusion
While India has demonstrated impressive momentum in its 5G public deployment, the slow adoption of CNPNs poses a challenge to its industrial transformation. By addressing the current roadblocks—simplifying processes, relaxing eligibility requirements, and reducing costs—the DoT can unlock the potential of private 5G networks. Doing so will ensure that Indian industries are not only connected but also competitive on the global stage, reaping the full benefits of 5G’s revolutionary capabilities.