Indian Telecoms Concerned About Satellite Spectrum Pricing

NEW DELHI: A prominent group representing major Indian telecom companies, including Reliance Jio and Bharti Airtel, has voiced concerns that their financial performance could be negatively impacted if India sets the pricing for satellite spectrum at levels deemed “unjustifiably low,” which would disproportionately favor satellite internet providers such as Elon Musk’s Starlink.

In May, the telecom regulator in India proposed that satellite service operators should remit 4% of their yearly revenue to the government for service provision. Starlink had previously advocated for India to allocate licenses rather than auction spectrum, aligning with a global approach that treats spectrum as a shared natural resource.

The Cellular Operators Association of India, in a communication to the telecoms ministry dated May 29, requested a reassessment of the proposed pricing structure. They argued that established telecom firms incur substantial upfront auction expenses for telecom spectrum, resulting in payments to the government that are approximately 21% higher than what satellite operators would be required to pay.

The letter stated, “The cost per MHz should be equivalent or at least comparable for both, particularly when utilized to serve the same consumer base with identical services.”

The communication further noted, “Satellite services are capable of delivering competitive and cost-effective alternatives to conventional terrestrial broadband.”

Requests for comments from Reliance and Airtel went unanswered. Starlink was unavailable for immediate comment.

According to a senior government source, the telecoms ministry is still evaluating the regulator’s pricing suggestions, noting that similar industry anxieties have emerged previously.

An industry insider indicated that telecom companies like Reliance Jio are concerned about offering similar wireless broadband services as satellite providers but bearing significantly higher costs.

To provide telecom, data, and broadband services, Reliance and other companies have invested nearly $20 billion in recent spectrum auctions to acquire 5G spectrum.

Ambani’s enterprise had previously pushed for the auction of satellite spectrum, opposing Starlink’s preferred administrative allocation approach.

While Reliance and Airtel entered into distribution agreements for Starlink equipment in March, they are expected to compete with Musk’s offerings upon their market launch.

Telecoms minister Jyotiraditya Scindia mentioned recently that Starlink’s licensing process is nearing completion.