Centre rejects satellite spectrum auction; Elon Musk says much appreciated

Earlier, Elon Musk had criticised Mukesh Ambani's auction proposal for satellite services as "unprecedented", while advocating for a direct licensing method of allocation

Billionaire Elon Musk appreciated Centre's hint over preferring allocation route for satellite spectrum on Tuesday, hours after Union Minister Jyotiraditya Scindia indicated that the Centre does not plan to opt for the auction route.

The development followed a day after Musk had criticised the auction plan sought by industrialist Mukesh Ambani, labelling it as “unprecedented”.

At an event in New Delhi, Scindia, who oversees the telecom ministry, said: "If you do decide to auction it, then you will differ on the process from the rest of the world." In response, Musk welcomed the comments and said that Starlink will do its best to serve India.

The development highlights the intensifying competition for satellite services in India, as the domestic market is expected to grow at 36 per cent a year to reach $1.9 billion by 2030. Musk’s company, Starlink, believes that direct licensing aligns with global practices, arguing that spectrum, as a natural resource, should be shared by companies. In contrast, Ambani’s Reliance contends that an auction is necessary to ensure a level playing field.

Satellite spectrum consists of radio frequencies used for satellite communications, and the International Telecommunication Union (ITU), a United Nations agency, allocates these frequencies for various services. India is a member of the ITU and has signed its treaty.

News agency Reuters reported on Sunday that Reliance had challenged the Indian telecom regulator’s consultation process, which suggests that satellite broadband spectrum should be allocated, not auctioned. The Telecom Regulatory Authority of India (Trai) is the regulatory body on the matter, and its final recommendations could significantly influence the Centre’s decision.

Notably, Bharti Airtel’s Sunil Mittal also echoed Musk’s views on the licensing route on Tuesday. Musk is eager to launch Starlink in India, but unresolved spectrum allocation issues could act as a hurdle.