Policy clarity: Trai recommendations should pave way for satellite internet

The Telecom Regulatory Authority of India (Trai) has paved the way for commercial satellite internet service in India by issuing recommendations on pricing, duration, and allocation modalities of spectrum. Although regulatory clarity has come much after some of the telecom companies were given the licence to offer satellite broadband, this is a significant development for the future of communication in the country, especially in the remote and rural areas that have been deprived of adequate connectivity. The Trai recommendations coincide with the government go-ahead to Starlink, a fully-owned subsidiary of SpaceX, which is majority-owned by Elon Musk. After a three-year wait, Starlink last week secured the letter of intent (LoI) from the Department of Telecommunications (DoT) to start its satellite broadband service in India.

 

The regulatory guidelines will help businesses get visibility on the timeline to start their India operations for high-speed and low-latency internet service. Also, the DoT nod for Starlink signals government pragmatism in ushering in satellite broadband  — with far-reaching implications for India’s development across areas such as health care and education. On its part, Starlink has agreed to comply with the security conditions such as local storage of data, and the government has displayed flexibility by not pressing for compliances that are not technically feasible.

 

Besides security issues, conflict over the mode of allocating airwaves had kept regulatory norms on hold for long. Aspiring service providers have been divided on whether satellite broadband should be auctioned or given in an administered manner. Even as spectrum is auctioned for terrestrial service, the government opted for administered allocation in the case of satellite broadband service, which is in sync with the international trend and also because it’s a pooled resource. The Trai recommendation of last week formally announced administered allocation, as against the auction route. On another key issue — pricing — the regulator has suggested no upfront payment for the spectrum, while recommending 4 per cent of adjusted gross revenue (AGR) as spectrum usage charge. In addition, operators will need to pay ~3,500 per MHz spectrum block annually and ~500 per subscriber a year for urban users. Trai has exempted telcos from paying the subscriber fee in rural areas, in a push to support the so-far digitally deprived category. In addition to the spectrum usage charge, there will be an annual 8 per cent licence fee too for the operators. The spectrum has been recommended for five years and can be extended by two years because of the evolving technologies in this space.

 

The Trai recommendations, issued after consultations with the industry, will have to be next approved by the Digital Communications Commission — the highest decision-making body in the telecom department — followed by ratification by the Union Cabinet. The fact that the industry is in a state of readiness to launch the service will prevent any further delay once the policy gets Cabinet approval. Recently, two top telcos — Reliance Jio and Bharti Airtel — had announced distribution tieups with SpaceX for Starlink, which already operates in 120 markets worldwide. OneWeb, majority-owned by the Sunil Bharti Mittal-led Bharti group, and Mukesh Ambani’s Reliance Jio are also planning to launch their broadband service. Policy clarity at this juncture should help transform the landscape of internet connectivity and bridge the digital divide in the country.