Trai proposes 4% AGR charge, 5-year term for satellite spectrum use

Satellite spectrum in India should be charged at 4 percent of Adjusted Gross Revenue (AGR) for both non-geostationary satellite orbit (NGSO) and Geostationary satellite orbit (GSO) based fixed-satellite service (FSS) and mobile satellite service (MSS), the Telecom Regulatory Authority of India (Trai) has recommended. It has also recommended spectrum should be assigned for 5 years.

 

Trai's recommendations clear yet another hurdle for satcom services in India. Airtel-backed Eutelsat Oneweb and Jio Satellite Communication have already gotten the global mobile personal communication by satellite (GMPCS) services license needed to provide satcom services in India, while Elon Musk-led Starlink is set to soon get the license.

 

NGSO refers to those satellites which occupy either a low-earth orbit (LEO) or medium-earth orbit. (MEO). Unlike geostationary GSO satellites, LEO and MEO satellites do not occupy a stationary position but move in relation to the Earth. 

 

The pricing model approved by the telecom regulator however states there should be a minimum annual spectrum charge of Rs. 3,500 per MHz for both and GSO and NGSO-based service. For the latter, an additional Rs. 500 per subscriber will be charged annually in urban areas, while rural subscribers would be exempted.

 

AGR is used to calculate the revenue that telecom companies must share with the government in the form of spectrum usage charges and license fees. AGR based spectrum charging is the existing practice for commercial VSAT service providers and BSNL, Trai officials said. Spectrum charges should be levied as a percentage of AGR for simplification and as part of ease of doing business, the recommendations said. "Overall spectrum charges do not need to be any higher than the administrative costs required to cover the allocation of spectrum. It will also facilitate investment and innovation," Trai has said in its recommendations.

Time and space

Arguing that satcom is currently in a nascent stage, and their 'business potential would emerge after some years of operations, and the useful life of LEO satellites is just half a decade, Trai said it has recommended the government assign spectrum for 5 years.

 

With foreign players like Starlink and Amazon's Project Kuiper trying to enter India, terrestrial operators Reliance Jio and Bharti Airtel had for the last one year repeatedly stressed the need to ensure level playing field between historical operators and newcomers. But the telecom operator has conclusively found MSS would only complement terrestrial service and 'there is no substantive case of level playing field between them', Trai Chairman Anil Kumar Lahoti stressed on Friday.

 

Under MSS provides satcom signals for mobile and remote users, while FSS allows earth stations at fixed locations transmit and receive signals using one or more satellites. MSS is used mainly for strategic use such as national security and government operations during natural disasters, in flight and maritime connectivity and distress communication.

 

As a result, such systems have little traffic carrying capacity, and are not comparable to terrestrial mobile networks, Trai said.

 

The Centre has also chosen higher frequency bands such as C, Ku, Ka, and Q/V bands to be assigned on a shared basis for satcom services, with a condition that each authorised entity, coordinate among themselves in good faith.