The Cellular Operators' Association of India (COAI) has reportedly reached out to the telecom department to express its concerns regarding the recommendations made by TRAI on the satcom spectrum. They stated that the recommendations are based on "incorrect assumptions," which have led to unjustifiably low spectrum charges for satellite services compared to terrestrial networks. In a letter dated May 29, COAI claimed that the implementation of these recommendations would adversely impact the sustainability of terrestrial services, which are essential for India’s digital infrastructure. They urged the Department of Telecom (DoT) to establish a committee that would conduct a thorough review of the recommendations, emphasising the need for fairness, transparency, and equity, while also providing telecom service providers (TSPs) the opportunity to share their perspectives.
Regulatory advantage to satellite operators
COAI argued that the recommendations offer a regulatory advantage to commercial non-geostationary satellite orbit (NGSO) satellites over terrestrial broadband service providers. They cautioned that accepting the recommendations in their current form would undermine competition and create an uneven playing field. Additionally, they claimed that the recommendations fail to address the crucial issue of competitive parity between terrestrial service providers and satellite operators serving the same market.
The association pointed out that TRAI has likely underestimated the capabilities of satellite networks while overstating those of terrestrial networks, which they believe has resulted in a flawed basis for the entire assessment. COAI indicated that relying on accurate capacity data from both satellite and terrestrial operators would have led to a more transparent and reliable evaluation of their respective capacities.
They highlighted that this fundamental flaw in capacity assumptions undermines the DoT’s mandate to promote competition between satellite and terrestrial services. COAI emphasised that incorrect assumptions have led to overly low spectrum charges for satellite services when compared to terrestrial networks. They noted that the regulator was expected to recommend a pricing structure that supports a level playing field after conducting a comprehensive techno-economic analysis, but instead, they found the recommendations based on ad-hoc spectrum charges set for non-competing very-small-aperture terminal (VSAT) services utilising geostationary satellites.
Recently, TRAI proposed that satellite communication companies like Starlink pay four percent of their adjusted gross revenue (AGR) as spectrum charges to the government, along with an additional Rs 500 per subscriber annually for those offering satellite-based broadband in urban areas, while services in rural areas would not incur additional levies.
Proposed spectrum charge
COAI also argued that the proposed spectrum charge of four percent of AGR lacks justification. They contended that TRAI should be aware that next-generation NGSO broadband services, such as low Earth orbit (LEO) and medium Earth orbit (MEO) constellations, can now compete directly with terrestrial fixed and mobile broadband networks. COAI insisted that TRAI’s current recommendations do not adequately ensure a level playing field.
Furthermore, COAI noted that the suggested spectrum charges are even lower than the administrative fees currently levied on geostationary VSAT services, which do not compete with terrestrial networks. They expressed concerns that revenue-sharing spectrum charges without any entry fees encourage regulatory arbitrage, thereby disadvantaging terrestrial broadband service providers.
Subsidy through Digital Bharat Nidhi
Additionally, COAI highlighted that the proposal to subsidise user terminals or satellite operators through the Digital Bharat Nidhi (DBN) fund further skews the levels against terrestrial operators, especially considering that a significant portion of the DBN levy comes from competing terrestrial operators. They criticised the recommendations as lacking transparency and being based on unjustifiable assumptions rather than factual data.
The organisation pointed out that the limited consideration of stakeholder inputs, along with the absence of extensive consultations on key issues—like ensuring competitive parity, evaluating network capacity, determining assignment methods, and establishing fair spectrum valuation—has led to recommendations that they view as inequitable, possibly contradicting the principles established in the Telecommunications Act of 2023.
