The Telecom Regulatory Authority of India (TRAI) announced its recommendations on Friday regarding the pricing of spectrum for satellite-based internet services. It suggests that operators, including Elon Musk's Starlink, pay a levy of 4 percent of their annual revenues. For those providing services in urban areas, an additional fee of Rs 500 per subscriber each year will apply, while no extra charge will be imposed for services in rural regions. TRAI proposed that the spectrum for satellite broadband be allocated for an initial period of five years, with the possibility of extending it for another two years. The 4 percent charge, based on adjusted gross revenue (AGR), will apply to both geostationary orbit (GSO) and non-geostationary orbit (NGSO) operators, with a minimum annual spectrum fee of Rs 3,500 per MHz.
In announcing these recommendations, TRAI chairman Anil Kumar Lahoti emphasized the crucial role that satellite communication services can play in improving connectivity in underserved areas lacking telecom infrastructure. They are also essential for disaster response and relief operations.
Earlier this week, Starlink received a Letter of Intent (LoI) to commence its services in India, although it must acquire a license before launching operations. SpaceX, the aerospace firm headed by Elon Musk, has already partnered with competitors Reliance Jio and Bharti Airtel to introduce Starlink's broadband services in the country. Both Indian companies will distribute Starlink equipment through their networks and assist with customer setup and activation.
In recent months, Jio and Airtel had joined forces to lobby for an auction process to allocate spectrum for satellite services in India. In contrast, Musk advocated for an administrative allocation in line with international norms. Last October, the government sided with Musk's approach, opting for a pre-determined price for the airwaves used to deliver low-latency internet via satellite.
Jio, India's largest wireless carrier, and Airtel, the second-largest player in a rapidly growing data market, expressed concerns that lower entry costs could erode their subscriber base. Following TRAI's recommendations, the Department of Telecommunications (DoT) will present the pricing of satellite spectrum to the Cabinet for approval. Once sanctioned, any satellite communication provider wishing to operate in India can apply.
Starlink operates the world's largest Low-Earth Orbit (LEO) satellite constellation, managed by SpaceX. Bharti Airtel also collaborates with Eutelsat OneWeb, the second-largest LEO constellation, while Jio has established a joint venture with SES, a leading global satellite-based content connectivity provider. Jio Space Technology Ltd, in which Jio holds a 51 percent stake and SES 49 percent, aims to utilize multi-orbit space networks. This setup combines geostationary (GEO) and medium-earth orbit (MEO) satellite constellations to provide high-capacity, multi-gigabit connections to enterprises, mobile backhaul, and retail customers across India and neighboring regions.
Eutelsat OneWeb, with Airtel as the largest shareholder holding a 21.2 percent stake, and Jio's partnership with SES have both already secured GMPCS licenses and approvals from IN-SPACe. Meanwhile, Starlink has over 6,000 LEO satellites in operation, while Amazon’s Kuiper project is set to deploy 3,236 satellites starting in early 2025.
Inputs from PTI