DCC sends TRAI’s satellite spectrum plan back for review
India’s Digital Communications Commission has sent most of TRAI’s satellite spectrum recommendations back for review, signaling a tougher stance on pricing, compliance, and market safeguards.
TRAI’s May proposals: spectrum charges, tenure, GSO/NGSO scope
TRAI recommended that satellite internet providers pay 4% of adjusted gross revenue (AGR) as spectrum usage charges, an additional Rs 500 per urban subscriber per year, and a minimum annual spectrum fee of Rs 3,500 per MHz when the AGR-linked payout falls short. It also suggested spectrum assignments for five years, extendable by two, covering both geostationary (GSO) and non-geostationary (NGSO) systems across Fixed and Mobile Satellite Services. The regulator argued for a lighter-touch regime given the nascent status of consumer satcom in India, with a review after five years.
DoT’s concerns: urban levy, anti-hoarding floor, early reviews
The Department of Telecommunications raised three core concerns. First, the urban levy is hard to operationalize: defining and maintaining an accurate rural–urban classification at subscriber level invites compliance complexity, disputes, and potential misuse. Second, the proposed Rs 3,500 per MHz annual minimum is seen as too low to deter spectrum warehousing, especially in mobile satellite services, where demand can spike rapidly. Third, the department wants flexibility to recalibrate terms earlier than five years if technology, traffic patterns, or market structure change.
DCC review, inter-ministerial stance, and next steps
At its September 16 meeting, the DCC—comprising senior DoT officials and representatives from finance, IT, and NITI Aayog—reviewed the satcom framework and withheld approval on most elements. TRAI’s position remains that satellite broadband does not yet compete directly with terrestrial networks, but DoT is anchoring the policy to broader sector economics and the need for enforceable safeguards from day one.
Pricing levers, market safeguards, and competition in satcom
The debate now centers on how to align satcom growth with affordability, rural coverage goals, and efficient spectrum use without distorting competition.
Replacing urban surcharge with targeted rural obligations
TRAI’s Rs 500 per-urban-subscriber annual levy is meant to nudge operators toward rural expansion. DoT questions whether this blunt instrument will deliver coverage or simply complicate billing. Expect alternatives to surface—such as targeted rural obligations, coverage-based milestones, or performance-linked incentives—rather than a flat urban tax that is difficult to administer at scale.
Higher minimum spectrum fees to deter warehousing
Raising the minimum annual spectrum charge above Rs 3,500 per MHz would reset the total cost of ownership and could favor well-capitalized players in early phases. Yet DoT’s logic is clear: satcom spectrum is scarce; a higher floor aligns incentives toward active use and faster service rollout across FSS and MSS in both GSO and NGSO bands. This is particularly relevant for NGSO constellations where capacity can be reallocated, and idle holdings risk market distortions.
DBN terminal subsidies: targeted use cases and milestones
TRAI proposed using the Digital Bharat Nidhi to subsidize end-user terminals, which today cost roughly Rs 20,000–50,000. DoT has asked for a redesign. A refined approach will likely target specific use cases—schools, health centers, remote enterprises, disaster zones—or rely on milestone-based reimbursements to drive verifiable adoption rather than blanket subsidies.
Capacity controls and D2M impacts on telco economics
Managing interference and protecting the revenue base of terrestrial operators are now central to satcom policy design.
Subscriber/capacity caps, interference mitigation, and reporting
DoT is pushing for subscriber limits per system to avoid congestion and harmful interference, alongside stronger coordination requirements. For NGSO fleets, that implies robust spectrum sharing, dynamic resource allocation, and transparent reporting to regulators. For enterprises, it should translate into clearer service-level expectations as traffic grows.
D2M levy alignment, interconnect rules, and gateway mandates
Direct-to-mobile satellite connectivity could let providers reach handsets without terrestrial intermediaries, challenging today’s levy and licensing construct. DoT’s concern is straightforward: if D2M bypasses charges borne by telcos, it could erode the sector’s financial stability. Expect harmonized levy frameworks, interconnect rules, and possibly domestic gateway mandates to emerge before D2M scales.
Compliance, localization, and security reshape cost curves
Security, localization, and indigenization mandates introduced earlier this year will materially influence satcom network design and costs.
Lawful intercept, data localization, and gateway security
Service providers must support lawful interception and monitoring within India and cannot route user connections through offshore terminals or process subscriber data outside the country. Gateways and hubs require security clearances, and monitoring equipment must meet domestic specifications. These are non-negotiable obligations that shape architecture choices and vendor selection.
Indigenization and ground segment localization strategy
Operators are required to localize a defined share of the ground segment over the initial years of operations, promoting domestic capability and supply chain resilience. This tilts investments toward Indian facilities, system integrators, and data center partners. Starlink, which recently secured provisional spectrum to run trials, plans ground stations at multiple sites with Mumbai as a central hub and is engaging third-party providers for gateway build-outs, including data center specialists such as Equinix. The direction of travel is clear: local gateways, local processing, and auditable security.
Market positions: Starlink, OneWeb, Jio Satellite, and Kuiper
Global LEO players and Indian stakeholders are aligning strategies while regulatory terms are finalized.
Approvals, trials, and ground segment build-outs
Eutelsat OneWeb and Jio Satellite Communications have licenses to offer satellite broadband in India, with Jio also tied to SES for high-throughput satellite capacity. Starlink has received provisional spectrum clearance to conduct trials and is building out its ground footprint and compliance stack. Amazon’s Project Kuiper awaits DoT’s approval pending additional formalities.
Competitive dynamics vs terrestrial networks and COAI stance
The Cellular Operators Association of India has criticized TRAI’s price framework as too lenient, arguing it could tilt the field against terrestrial operators. The next iteration of policy will influence whether satcom primarily complements mobile networks—through backhaul, mobility, and remote enterprise access—or competes at the edge via D2M and fixed wireless substitutes. The balance of levies, minimum fees, and capacity controls will define the investability of each model.
What to do now: operator, telco, and enterprise actions
With policy in flux, stakeholders should plan for multiple regulatory outcomes and de-risk execution choices.
Satellite operator playbook: pricing, capacity, and compliance
Model scenarios with higher minimum spectrum fees and revised urban-rural constructs, and stress-test pricing for consumer and enterprise tiers. Prepare for subscriber or capacity caps with dynamic congestion controls and transparent QoS reporting. Build compliance by design: lawful intercept, monitoring, data localization, and gateway security approvals. Engage early on DBN subsidy design to align funding with verifiable coverage outcomes and enterprise use cases.
Telco and enterprise strategy: partnerships, SLAs, and resilience
Mobile operators should evaluate wholesale, backhaul, and emergency restoration partnerships with LEO/GEO providers, while shaping D2M rules that preserve a level playing field. Enterprises in energy, mining, maritime, aviation, and public sector should factor localized gateways, SLAs, and security certifications into RFPs, and consider multi-orbit path diversity for resilience. Watch for final decisions on spectrum floors, terminal subsidies, and D2M levies—these will directly impact TCO, service availability, and time to deploy.
