Trai Addresses Concerns Regarding Satcom Spectrum Levy's Impact on Telecom Companies

The Telecom Regulatory Authority of India (Trai) has addressed concerns regarding its proposal to set the spectrum levy for satellite communication firms like Starlink at 4% of revenue. Trai Chairman Anil Kumar Lahoti clarified that satellite services do not compete with terrestrial services, such as those provided by Reliance Jio and Bharti Airtel.

Representative image

In a detailed analysis, Lahoti highlighted the significant capacity difference between terrestrial and satellite networks. He stated that the capacity ratio ranges from 60:1 to 250:1, indicating that the two services are not equivalent but rather complementary. For instance, in Delhi, where there is a demand for 50 lakh broadband connections, a single satellite constellation can only provide 10,000-20,000 connections.

Spectrum Pricing and Market Dynamics

Trai's recommendations include a 4% spectrum charge on adjusted gross revenue (AGR) for satellite companies. This rate is higher than what these firms had hoped for and may impact telecom operators. Additionally, operators offering satellite-based broadband in urban areas would incur an extra Rs 500 per subscriber annually. However, no additional levy applies to rural services.

Lahoti explained that spectrum pricing for satellite services is generally low in many global markets. He emphasised that while terrestrial broadband services have exclusive spectrum assignments, satcom services share pooled resources. Therefore, pricing cannot be the same for both.

Licence Fees and Regulatory Context

Besides spectrum charges, an 8% licence fee will also apply to satcom players. Lahoti noted that spectrum pricing and licence fees are distinct; both must be paid according to their respective terms. The regulator's role is limited to addressing government references on spectrum pricing and related terms.

Regarding bilateral trade negotiations' influence on satcom recommendations, Lahoti stated that Trai's focus remains on the government's reference. Any trade agreement issues fall under government jurisdiction, not Trai's purview.

Technical Considerations for Satellite Services

Lahoti addressed whether Starlink could offer direct-to-mobile services in India after paying spectrum charges. He explained that Starlink's applied satellite constellation operates in Ku and Ka bands, which mobile devices do not support. For satellites providing direct mobile services, non-terrestrial networks typically use the same bands as terrestrial ones.

In such scenarios, satcom players globally acquire spectrum from terrestrial counterparts. This arrangement ensures compatibility and service delivery across different network types.

Overall, Trai's recommendations aim to balance market dynamics while recognising the distinct roles of satellite and terrestrial services in India's telecommunications landscape.

With inputs from PTI