Using satellite communications (Satcom) to provide internet services could be a new frontier for India’s telecom service industry. While the government seems committed to the entry of satellite internet services, a clear policy has not yet been finalised.
There are multiple companies looking for entry into this space. Indian telco majors Bharti Airtel and Reliance Jio both intend to make their foray into satcom. Airtel plans to do this in collaboration with Eutelsat Oneweb. Reliance has signed a collaboration agreement with Belgium’s SES via Jio-SES. Global service providers, Starlink and Amazon Kuiper, which are controlled by two of the world’s richest men, Elon Musk and Jeff Bezos respectively, also wish to enter the Indian satcom space.
Satellite telecommunications could plug the existing gap in network coverage. It is a technological solution for communications in difficult terrains and at sea. Given the country’s multiple mountain chains, heavily forested areas and far-flung archipelagos, a large part of the population is underserved. Satcom could connect such regions with greater ease than terrestrial networks. This would also be a potential booster for India’s space and aerospace economy, which is projected to reach $44 billion by 2033, with an estimated 8 per cent share of the global market, up from its current 2 per cent.
However, policy issues need to be cleared. Spectrum allocation is a big issue. The government has chosen administrative allocation of satellite spectrum. This is the normal global practice and the government has made appropriate changes to rules and regulations of the Telecommunications Act, 2023. However, Jio would prefer auctions while Airtel seems to prefer a mixed format, if satcom is offered to retail users. There has been lobbying to that effect.
Security is another major area of concern. Satcom carries high security risks inherent to the technology. Starlink (and probably Amazon too) prefers the remote management of satellite networks (perhaps from outside India’s territory) and they would not like to be held to latitude-longitude binding of fixed terminals. There is talk that India may relax conditions to allow this.
The Department of Telecommunications (DoT) is said to have discussed and shared proposed changes to regulations with the four major players — Bharti-backed Eutelsat Oneweb, Reliance Jio-SES, Starlink, and Amazon Kuiper — asking for their inputs. However, these companies have asked for more time to study the proposed changes and revert.
The government will set charges for spectrum usage. “Spectrum assigned administratively is also chargeable and hence, contributes to revenue. DoT has sought recommendations from the Telecom Regulatory Authority of India (TRAI) on the terms and conditions of spectrum assignment, including spectrum pricing with respect to licensees intending to provide satellite-based communication services, while accounting for a level playing field with terrestrial access services,” according to a statement by Minister of State for Telecom Pemmasani Chandra Sekhar in the Lok Sabha.
The minister also stated that security-related restrictions and checks are in place to ensure that satcom services are not misused by non-state actors or hostile nations: “DoT grants authorisations under unified licence for providing satellite-based commercial communication services. Satellite-based communication licences are granted to any applicant, subject to acceptance and in compliance with the applicable licensing terms and conditions, including security conditions of India.”
The Union telecom minister, Jyotiraditya Scindia, has also said that the government is more than happy to allow Starlink to operate, but only after addressing security and
other concerns.
Entities applying for satcom licences in India must adhere to some 30-40 conditions under the global mobile personal communication by satellite (GMPCS) system. It is possible, however, that some of these stipulations may be relaxed.
Applications from Starlink and Amazon Kuiper for GMPCS licences are pending, as both firms have yet to fulfil security prerequisites. The security considerations would surely have to be satisfied before the government can grant a licence to any satcom service provider.
Starlink, with over 6,000 low earth orbit satellites, previously pledged to offer free connectivity to rural areas in line with government initiatives. Amazon’s Project Kuiper aims to deploy 3,236 satellites starting in 2025, with commercial services expected to commence later in the year.
However, the argument about spectrum allocation is likely to continue for a while. It is not global practice to auction satellite spectrum due to its very nature. Satellite spectrum in the Ku-band (14 GHz) and Ka-band (27.1 to 31 GHz) is intrinsically capable of being shared, which renders auctions impractical. The differentiation is marked in Schedule 1 of the Telecommunications Act, 2023.
Satellite spectrum is deployed at high altitudes and frequencies, which inherently allows it to be shared. It is difficult to exclusively allocate this spectrum and nations such as Brazil and the US, which tried to do this, switched to administrative allocation.
Unlike terrestrial spectrum used in mobile communications, satellite spectrum has no national territorial limits. It is coordinated and managed by the UN agency, the International Telecommunication Union.
Hence, after changes to the act, DoT asked TRAI to work out methodologies for pricing this spectrum. In September, TRAI issued a consultation paper titled “Terms and Conditions for the Assignment of Spectrum for Certain Satellite-Based Commercial Communication Services”, which sought industry inputs on how to price spectrum for satcom services via the administrative route.
In letters written to both TRAI and DoT, Reliance Jio has made a case for auctions, with the argument that administrative allocation may not bring about a level playing field between satellite and terrestrial services.
Sunil Bharti Mittal, chairperson of Bharti Enterprises, has also said that companies looking to offer satellite services in urban areas and to retail customers should buy spectrum and be bound by the same conditions as companies offering terrestrial services.
OneWeb “strongly recommended” the administrative allocation route with a fee “in order to promote investment and make sure competitive prices are available to the market at the end”. Mittal’s statement was further clarified in a statement by Bharti Airtel. “Satellite operators who want to provide services to urban areas and retail customers need to go through the regular licensing process and to obtain a licence; buy the spectrum; undertake all the obligations, including roll-out and security; and pay their licence fees and taxes. Therefore, mobile operators and satcom operators, who have worked in harmony for decades, can continue to do so and serve those who are still struggling to find internet connectivity,” Airtel said in a statement.
If one parses these statements, Airtel seems to accept the administrative allocation of satellite spectrum with a fee. But it wants satcom operators to follow up with further licensing commitments if satcom services are being offered to retail customers and in urban areas.
Eutelsat OneWeb holds a GMPCS licence, which is required to roll out satellite internet services in India. OneWeb’s UK holding company has put in a foreign direct investment application to the Indian government.
Let us assume that the policy issues are sorted out and Starlink, Amazon Kuiper, Jio SES and Airtel OneWeb all launch satcom services. How big is the market and how fast will it grow? Opinions differ.
An optimistic assessment comes from consulting firm KPMG, which estimated in a recent report that India’s satcom sector, currently a relatively small $2.3 billion, will reach $20 billion by 2028. Investment bank Morgan Stanley has estimated that roughly 290.4 million households in India are untapped by broadband, which presents a big market opportunity.
This is optimistic because a substantial proportion of those households have the options of 5G mobile, fixed wireless access and fibre. That is familiar technology and it will almost certainly be cheaper and probably low latency compared to satcom. Satellite broadband requires new equipment.
Forrester, however, suggests that satcom cannot compete with terrestrial broadband because of the pricing difference. Ashutosh Sharma, vice president and research director at Forrester, says, “Considering 5G coverage is widespread, the space for satellite coverage to grow is very limited. The second thing, if you look at the space, is price economics. If you come to retail, things start to fall apart.”
Affordability will make it hard for satcom to build a substantial subscriber base. Of course, satcom will be a boon for industries such as shipping, aviation and logistics, and other specialised use cases will develop. It could also strengthen backhaul for terrestrial networks.
Everyone agrees that it would plug gaps in terrestrial coverage and the fact that four of the world’s largest service providers are looking to enter this space leads one to believe that it is financially viable. Since competition on a level playing field is desirable in any industry, policymakers should emulate global best practices to try and ensure this. The sooner the policy issues are resolved and satcom services launched, the better it will be for India, in view of its potential for greater and wider connectivity.
Devangshu Datta
