Telcos cry foul over Trai's 'complement, not compete' satellite stand

Telecommunications (telecom) operators are discussing a draft circulated among members of the Cellular Operators Association of India (COAI), which plans to challenge the fundamental contention of the Telecom Regulatory Authority of India (Trai) that satellite and terrestrial broadband services are not “competing services” but merely “complement” each other. As a result, Trai argues, there is no requirement for a “level playing field” between the two.

 

These conclusions were part of Trai’s recommendation on pricing of spectrum for satellite services to the Department of Telecommunications (DoT), released a few days ago.

 

According to Trai, the capacity ratio between terrestrial and satellite ranges from 60:1 to 250:1 and is heavily skewed in favour of terrestrial services.

 

A senior COAI executive confirmed that a draft letter is in circulation among relevant members, but said they are unable to divulge details. 

 

Telecom companies (telcos) have rejected Trai’s contention and are planning to challenge it in their response to the regulator’s recommendation to DoT. 

 

A senior executive at one of the telcos said: “The regulator has grossly underestimated, in its calculation, the huge bandwidth capacity that satellite players are generating, which will far surpass that of most terrestrial operators. As a result, they will compete aggressively and disrupt the competitive balance for terrestrial operators. So they are clear competitors.”

 

He argued that telcos, in their comments on the consultation paper, had provided detailed analysis of satellite capacity but Trai has assumed it to be far lower. It also did not seek data from telcos that are also running satellite services on their capacity . However, the regulator rejected the need to address this in order to ensure a level playing field in spectrum pricing.

 

They also argue that there is no restriction mandating that satellite services be used only in remote and unconnected areas — a key reason why the regulator assumes it to be a niche service complementing terrestrial networks.

 

For instance, telcos point out that satellite communication players face no legal restrictions on offering pan-Indian services. The regulator has even allowed its usage explicitly in urban areas, provided operators pay an additional ₹500 per subscriber per annum to the government.

 

Telcos further argue that the administrative pricing mechanism completely ignores the fact that terrestrial operators must pay an additional ₹18-2 for every ₹100 earned from a subscriber, as they are required to pay instalments (with interest) for spectrum purchased through auctions — something satellite operators are not subjected to. This, they claim, gives satellite players a clear pricing and competitive advantage.