Athira Sethu
Kochi, 9 November 2024
The Indian government recently has agreed to provide spectrum specifically for satellite broadband services. This announcement can prove to be a major stimulus for global satellite companies like Elon Musk’s Starlink. Communications Minister Jyotiraditya Scindia said the country will follow an “assignment-based approach” for the satellite spectrum. This method has followed international guidelines developed by the International Telecommunications Union and against the demands of Indian telecom companies, which were asking for a competitive bidding process.
Starlink, which had applied for a license to operate in India, has been espousing an administrative allocation. Under this system, the government fixes the price for the spectrum, instead of auctioning off the lot to the highest bidder. This is the norm across the world for satellite broadband services and would enable companies like Starlink to dodge the high costs associated with auctioning off the traditional telecom spectrum. This would enable Starlink to market its services at an affordable price in one of the fastest-growing internet markets in the world, India, as prices are announced upfront.
Minister Scindia explained that India’s policy is supposed to be at par with international standards, as most of the countries follow ITU’s suggestion to allocate the satellite frequency spectrum to throw out invites to auctions. This changed policy will ease the introduction of international satellite operators to the Indian market since a strong necessity exists for more internet availability especially, in the rural and more neglected areas.
This decision seems to raise some eyebrows in major Indian telecom companies like Reliance Jio and Bharti Airtel, two of the companies led by Mukesh Ambani and Sunil Mittal. These companies are of the opinion that just like terrestrial telecom spectrum acquired after a competitive and costly bidding process, satellite spectrum should be put up for auction. Both Ambani and Mittal, who also have an interest in the satellite broadband market, feel that an administrative allocation benefits the foreign companies, as they avoid such high costs of auction, thus creating an uneven market.
The new Telecom Act of India supports this kind of approach. Satellite communication spectrum is placed in the class “Schedule 1,” meaning allocation would be more feasible than auction. The classification is attempting to simplify the satellite operations process and bring India’s policy in line with global norms.
The new Telecom Act of India supports this kind of approach. Satellite communication spectrum is placed in the class “Schedule 1,” meaning allocation would be more feasible than auction. The classification is attempting to simplify the satellite operations process and bring India’s policy in line with global norms.
