The ball is now in the court of the telecom regulator, which recently concluded an intense consultation process, culminating in a marathon open-house discussion on July 14 that lasted almost 12 hours with about 30 speakers from across the world pressing their views.
Throughout the consultation, the big satellite entities warned that auctions would make broadband from space services unaffordable in India and deprive millions, particularly in rural and underserved regions, of high-speed satellite internet connectivity.
After the Telecom Regulatory Authority of India (Trai) makes its recommendations, the Department of Telecommunications (DoT) will take the final call.
Market potential
The stakes are high. EY estimates India’s space economy will grow to $13 billion by 2025 from an annual revenue opportunity of $1 billion now.
Discover the stories of your interest
Global players such as Starlink, Amazon’s Project Kuiper, OneWeb and Telesat among others are all eyeing the nascent satellite broadband market in India. Nearly 75% of rural India doesn’t have broadband access and many locations still lack cellular or fibre connectivity. As a result, satellite systems that can be rolled out a lot quicker than terrestrial telecom networks in rural and remote regions are seen as a viable alternative to connect the unconnected. The DoT has already issued global mobile personal communication by satellite services (GMPCS) permits to OneWeb and Reliance Jio’s satellite arm. Starlink too is likely to be granted a licence in coming months. Apart from these firms, Amazon’s Project Kuiper has evinced interest in entering the world’s second-largest telecom market with fast broadband services using satellites. Several Indian companies such as Tata-backed Nelco are eyeing the market. All satellite players, though, will also require key approvals for landing rights and market access as well as clearances for setting up in-country earth stations from IN-SPACe, the space services regulator.
These approvals are vital for satcom players to use their global low earth orbit (LEO) constellations and launch broadband-from-space services in India. India’s recently unveiled Space Policy 2023 has empowered IN-SPACe to act as the sole single-window agency to authorise the gamut of space activities by both government and private satcom players.
What’s at stake
Satcom players, typically, require spectrum in the Ka (27.5 to 29.1 GHz and 29.5 to 30 GHz) and Ku (14 GHz) bands for delivering satellite broadband services in India. Going forward, they will also need airwaves in the Q / V bands (37.5-52.4 GHz) to run next-gen satellite systems.
Accordingly, they believe forcing a spectrum auction would hurt the business viability of satellite communications in India and rob the country of billions of dollars in potential foreign direct investment (FDI) in the satcoms space.
Their rationale: satellite spectrum can’t be broken down into exclusive blocks or chunks as in the case of terrestrial airwaves for auctions as it’s a shared resource. Auctioning these airwaves, they say, will cause fragmentation, trigger inefficiencies and go against the spectrum management rules laid down by the International Telecom Union (ITU) and India’s National Frequency Allocation Plan (NFAP).
Global scenario
Amazon says an auction would be an inappropriate method for assigning satellite spectrum as it would result in higher prices for customers and stifle competition. It could grant entities capable of submitting the highest bids exclusivity over that spectrum, blocking other potential users and, in turn, artificially limiting competition to just a few players.
“Trai itself acknowledges that around the world there is no precedent of auctioning spectrum in the higher frequency bands for satellite communication services,” Amazon said in its recent submission to the regulator. “In the year 2000, the US legally prohibited satellite spectrum from being auctioned by enacting the Orbit Act, while Brazil and Mexico have also abandoned auction processes.”
Even Thailand’s attempts to auction airwaves for satellite usage were unsuccessful, it said. The country’s National Broadcasting & Telecommunications Commission saw just two bidders–one of which was a government-owned company–after it conducted an auction for orbital slots.
Anirudh Rastogi, founder and managing partner of Ikigai Law, backs this view. No government has ever auctioned satellite spectrum and previous attempts like those in the US, Brazil and Mexico related to orbital slots only, he said. An orbital slot may be likened to a parking slot in space for a satellite to operate at a particular frequency and provide satcom services over a particular country.
“Auctions, in general, don’t work for the satcom business model and these countries (US, Brazil and Mexico) were unsuccessful in attracting bidders, resulting in their abandoning `auctions’ altogether as an approach towards distributing satcom resources,” said the Ikigai Law founder.
Ikigai is a tech-focused law firm that advises some of the world’s biggest satellite service players.
The counter
India’s telecom market leader Jio disagrees and is strongly backing the auction route, underlining the criticality of the ‘same service, same rules’ principle for satellite airwaves allotment to prevent imbalanced competition. Its view is that companies such as Starlink, OneWeb, Amazon-backed Kuiper and Telesat would be in direct competition with India’s top telcos to grab a piece of the emerging multi-billion-dollar satellite broadband revenue pie.
Last year, Reliance-backed Jio Platforms and Luxembourg-based SES formed a 51:49 joint venture to deliver broadband services in India through satellites, entering a space where the likes of Sunil Mittal-led OneWeb, Starlink, Amazon and the Tatas had already announced forays.
“Auctioning satellite spectrum emerges as the sole viable strategy to guarantee a balanced competitive landscape amongst competing providers as the business plans of Starlink, OneWeb, Kuiper and Telesat indicate they are strategically planning their networks to compete with terrestrial communication service providers (in India),” Jio recently told Trai.
The Mukesh Ambani-owned telco added that the business plans of Starlink, OneWeb, Amazon-Kuiper and Telesat also emphasise the allocation of substantial capacity for access services, demonstrating their explicit intention to instigate competition with terrestrial networks. “Hence, it’s crucial to ensure spectrum assignment rules for networks offering competing services are uniform and fair, without granting any stakeholder a preferential treatment,” Jio said.
Vodafone Idea, which is also backing auctions, called the satellite industry’s call for administrative allocation in the name of ringing in affordable broadband services, a misrepresentation of facts.
During the recent consultation, Vi told Trai that some space-based communications providers charge a steep £75 a month for services and £449 for hardware in the UK and as much as $120 a month for services and $599 for hardware support in the US. “Even if such prices are normalised to the Indian context, it indicates that the services will not be targeted at providing connectivity to users in India’s rural and remote areas but primarily in urban/towns/cities and commercial areas of the country,” it said.
Amazon rejected the ‘same service, same rules’ principle, saying this is not applicable since satellite operators share spectrum unlike mobile service systems that require exclusive use of airwaves by terrestrial mobile operators.
“Given that fixed-satellite service (FSS) and mobile service (MS) systems are so fundamentally different in their use of spectrum, and the services provided through these different systems are also not similar, applying the same rules to both will result in unfair and unequal treatment,” it said.
Musk’s Starlink has backed Amazon, saying the argument over ‘same service, same rules’ is misleading and disingenuous. “Just because terrestrial operators refuse to deploy a technology capable of sharing spectrum with competitors, does not mean that Trai should ignore the reality of a satellite ecosystem that allows all systems to simultaneously share spectrum,” Starlink said in its Trai submission.
Interestingly, Bharti Group-backed Airtel is the sole telco opposing an auction as it feels such a move could land Indian players at a disadvantage against global operators.
“Airtel is concerned that auctioning the satellite spectrum and creating an exclusiveness will create barriers for competition as rivals may block access to it by bidding and winning partial or full spectrum in spite of having no such global allocation, and make satellite systems redundant and severely hamper the emerging space ecosystem in the country,” it said.
Global satellite players have also underlined challenges in determining accurate base price of satellite spectrum.
“Satellite spectrum has different use cases, from feeder links, backhaul, retail, broadcast, VSAT, DTH to DSNG (digital satellite news gathering),” Hughes Communications India said in its submission to the regulator. “It’s very difficult to arrive at a reserve price as the revenue potential for each of these use cases is different and any segmentation of satellite spectrum will reduce its usability/efficiency by the operators and further reduce its value.”
Over to DoT
Industry experts say the future of the India satellite broadband opportunity will ultimately hinge on the position that DoT takes on the spectrum allotment mode.
Amid the fierce fight over the mode of satellite spectrum allotment, DoT has backed auctions as the preferred mode, aligning with Jio and Vi’s stance. A top DoT official recently told ET that satcom airwaves must be given to the highest bidder as there are many companies vying to enter the market, and also since the bandwidth would be used for commercial purposes. The government is of the view that satellite spectrum will be used in accessing customers, just like mobile networks, which builds the case for auctions as the ideal way to allocate such airwaves.
Ex-attorney general Mukul Rohatgi recently backed the administrative allocation of spectrum for satellite services, while offering his legal opinion on queries raised by the Broadband India Forum (BIF), which counts tech and satcom firms like OneWeb, Nelco, Amazon, Hughes, Inmarsat, Microsoft, Google, Netflix and Meta among its key members.
DoT is faced with making some hard choices when it eventually decides which way to go—auctions or allocations—once Trai makes its recommendations.
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