No auction for satellite spectrum; Trai tasked with pricing strategy

Union Communications Minister Jyotiraditya Scindia’s recent statement that satellite spectrum will be administratively allocated has brought clarity that auction is ruled out, reaffirming the global norm of shared satellite spectrum. The ball is now in the court of the Telecom Regulatory Authority of India (Trai) to settle the pricing matter. With auction out of the way, Trai has to create a formula on how to allocate spectrum and at what price. The telecom regulator will also have to address a contentious issue on whether the rules guiding the rural and urban satellite service providers will be the same.

At a time when 5G and 6G telecom services are a critical discussion point for their use cases or lack of them, satellite communication has divided industry players. While Mukesh Ambani-promoted Reliance Jio is backing the auction route for satellite spectrum, citing the need for a level-playing field with terrestrial players, the Bharti group, led by Sunil Mittal, has been pushing for the global practice of administered allocation of airwaves for satellite communication. However, Mr Mittal surprised industry watchers on Tuesday at a telecom summit in New Delhi, in the presence of Prime Minister Narendra Modi, Mr Scindia, and business bigwigs, when he said from the podium that satellite companies that had the ambition to come into urban areas and serve elite retail customers needed to take the telecom licence just like everybody else did. He added they must be bound by the same legal conditions, pay licence fees, and buy spectrum just like the telecom companies. Even as Mr Mittal did not name any company while talking about urban and elite services, it seemed like a veiled reference to foreign players seeking to provide satellite communication service in India.
 

Besides Reliance Jio and OneWeb (where the Bharti group is the leading investor), foreign companies, including Elon Musk’s Starlink and Amazon’s Project Kuiper, are among the key aspirants in India’s satellite communication space. Even as Starlink and Kuiper are yet to get the government nod to operate in India, Trai should move fast in setting norms and guidelines for the satellite industry — norms and guidelines that can co-exist with those of the terrestrial networks, as is the case globally. On its part, Trai has maintained it would take on board all comments and inputs on the subject before making its recommendation on satellite communication spectrum allocation.
 

However, Trai Chairman Anil Kumar Lahoti has made it clear that the content of the consultation paper issued on the subject last month will not be retracted even as some telcos are pushing for a change. In its consultation paper, Trai had suggested linking the satellite spectrum charges to the adjusted gross revenue (AGR) of a company. According to the regulator, such a formula will provide for a flexible financial burden that aligns with an operator’s capacity to pay. Framing satcom rules, already delayed, will set the ground for a vibrant telecom and broadband ecosystem for rural India. According to an annual indicator report of Trai released in August, India’s rural teledensity was lower than 60 per cent against over 133 per cent in urban parts of the country. Against that backdrop, satellite communication will help connect the nooks and corners of rural India, which will help open up opportunities in these areas.