The Telecom Regulatory Authority of India (TRAI) on Monday stood firm on its original recommendations regarding satellite communications (satcom) spectrum fees, rejecting proposed changes from the Department of Telecommunications (DoT).
The regulatory disagreement
The DoT had sought to amend TRAI's recommendations on the methodology and charges for satcom spectrum allocation. The companies vying to launch services in India, including Elon Musk's Starlink, Bharti Group-backed Eutelsat OneWeb, and Jio SES, are impacted by this decision.
The key points of disagreement were:
- Spectrum Fee: TRAI recommended a 4 per cent annual spectrum charge. The DoT proposed raising this to 5 per cent but offered a 1 per cent discount if 5 per cent of a company’s new customers in a year came from challenging terrains like border and remote hilly areas.
- Per-Connection Fee: The DoT also sought to drop a proposed Rs 500 annual fee per connection in urban areas if the tough-terrain target was met.
TRAI explicitly rejected the DoT’s compromise: "The Authority does not concur with the DoT's proposal to charge the spectrum at the rate of 5 per cent of AGR [Adjusted Gross Revenue] with conditional discounts for providing connectivity to hard-to-connect areas such as border/hills/islands".
TRAI’s rationale for the urban fee
The TRAI has stood by its plan to introduce an annual charge of Rs 500 for each subscriber in city areas, while allowing rural and remote regions to be exempt from this fee. The regulator noted that people living in cities usually have more disposable income and tend to use more data. Without this financial incentive, Non-Geostationary Orbit (NGSO) Fixed Satellite Services (FSS) providers might prioritise profitable urban areas, thereby "potentially undermining the goal of bridging the digital divide in rural and remote areas". TRAI stated that this charge "may provide an incentive for operators to expand their services into rural and remote areas".
TRAI reiteration and future possibilities
TRAI ultimately "reiterates its recommendations" but opened the door for government intervention, stating:
"..the Government may adopt any additional schemes to take advantage of FSS... for faster and economical expansion of broadband services in identified hard-to-connect areas, including but not limited to hills, border areas and islands, particularly addressing affordability of user terminals".
What this means for users
Recent response from TRAI suggests that satellite internet providers, such as Starlink, won’t need to change their pricing much. Starlink has already shared some of its pricing based on these recommendations, and other companies like Airtel and Jio are expected to offer similar plans. It is now up to the Department of Telecommunications (DoT) to either approve, reject, or refer back these recommendations before spectrum can be allocated to satellite internet operators in India. If the DoT adopts the TRAI recommendations, major changes to satellite internet pricing are unlikely, and operations are expected to begin soon.
A key point to note is that the government still has the option to create special programs or incentives to support satellite internet services in hard-to-reach areas. This could be a big help for people living in those locations who struggle with getting a reliable internet connection.
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