4% of AGR as spectrum charge: Trai paves way for satellite internet

TRAI recommends 4 per cent AGR-based SUC for satcom, Rs 3,500 per MHz fee, no auctions, and exemptions for rural users to promote affordability and competition

Satellite communication operators in India should have to pay 4 per cent of their annual adjusted gross revenue (AGR) as spectrum usage charges (SUC) to offer services in the country, the Telecom Regulatory Authority of India (Trai) recommended on Friday. The authority also proposed that the space spectrum be assigned for five years, extendable by an additional two years. 

The pricing formula has been kept uniform for both non-geostationary satellite orbit (NGSO) and geostationary satellite orbit (GSO) -based fixed-satellite service (FSS) and mobile satellite service (MSS). In addition, Trai has mandated a minimum spectrum charge of ₹3,500 per MHz per annum for both GSO and NGSO services. For NGSO, an additional ₹500 per subscriber will be levied annually in urban areas, while rural users will be exempt. In addition to the SUC, an 8 per cent licence fee will apply to these players, Trai Chairman Anil Kumar Lahoti said. 

Trai recommended that operators not be charged a separate fee to get access to satellite spectrum — unlike terrestrial spectrum, which is auctioned. Lahoti defended this by arguing that satellite spectrum is a pooled resource, and stressed that it was priced accordingly across the world. 

 

NGSO satellites operate in low-earth orbit (LEO) or medium-earth orbit (MEO) and move relative to the Earth, unlike GSO satellites that remain fixed over a point on the equator. 

AGR is used to calculate the revenue that telecom companies must share with the government via SUC and licence fees. Trai officials said spectrum charges based on AGR were already in practice for commercial VSAT providers and Bharat Sanchar Nigam Limited (BSNL). Spectrum charges should be levied as a percentage of AGR for simplification and as part of ease of doing business, Trai recommended. 

“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 said in its recommendations. It also proposed that each authorised entity should coordinate among themselves “in good faith”.

 

Trai’s recommendations clear yet another hurdle for satcom services in India. Airtel-backed Eutelsat Oneweb and Jio Satellite Communication have already received global mobile personal communication by satellite (GMPCS) services licence needed to provide satcom services in India, while Elon Musk’s Starlink got an approval from the department of telecommunications earlier this week.

 

The satcom industry welcomed the prices. “The proposed framework for spectrum charges in the Trai recommendations balances the need for government revenue with the imperative to keep satellite services affordable and accessible along with a level playing field,” said A K Bhatt, director general of the Indian Space Association (ISpA). 

 

Time and space

 

Arguing that satcom is at a nascent stage and its business potential would take time to materialise, and the useful life of LEO satellites is just five years, Trai recommended that the government assign spectrum for five years.

 

Domestic players, such as Reliance Jio and Bharti Airtel, had raised concerns about ensuring a level playing field with global players like Starlink and Amazon’s Project Kuiper. But the telecom regulator has concluded that MSS would only complement terrestrial service. “There is no substantive case of level playing field between them,” Lahoti said.

 

MSS provides satcom signals for mobile and remote users, while FSS allows earth stations at fixed locations to transmit and receive signals through one or more satellites. MSS is mainly used for strategic purposes, such as national security, disaster response, maritime, and in-flight connectivity. As a result, such systems have little traffic-carrying capacity, and are not comparable to terrestrial mobile networks, Trai said.

 

Trai has proposed that higher frequency bands, such as C, Ku, Ka, and Q/V bands, be assigned on a shared basis for satcom services. 

CLEAR SIGNALS

 

* Space spectrum to also attract 8% licence fees, similar to terrestrial 

 

* Satellite spectrum to be allocated administratively without charge, while terrestrial spectrum is auctioned

 

* Higher frequency bands like C, Ku, Ka, Q/V to be given on shared basis

 

* Operators to 'coordinate in good faith' on spectrum, earth station gateways