Satellite internet is likely to be costly in urban India as telecom regulator Trai has announced a spectrum charge of 4 per cent of adjusted gross revenue (AGR), much higher than what operators like Elon Musk’s Starlink have been lobbying for.
Starlink last year had pitched for allocation of spectrum at less than 1 per cent of AGR, a metric used to determine the revenue telecom operators share with the government, through spectrum use charges and licensing fees.
Trai on Friday released its recommendations on terms and conditions for the assignment of spectrum for satellite-based commercial communication services, where it fixed a spectrum charge of 4 per cent AGR (with an upper limit of ₹3,500 per MHz annually), which is applicable for both non-geostationary satellite orbit (NGSO) and geostationary satellite orbit (GSO) based fixed-satellite service (FSS) and mobile satellite service (MSS).
The regulator has also announced an additional charge of ₹500 per subscriber in urban areas for NGSO service providers, while exempting rural areas from this additional charge.
NGSO refers to satellites occupying either a low-earth orbit (LEO) or medium-earth orbit (MEO). Unlike GSO satellites, LEO and MEO satellites do not occupy a stationary position but move in relation to the Earth.
Trai recommended that satellite broadband spectrum be allotted for five years, which can be extended by another two years.
Based on the recommendations of Trai, the Union Department of Telecommunications (DoT) would go to the Cabinet for pricing of satellite spectrum and once approved, any satcom player wanting to offer services in India can apply.
Trai chairman Anil Kumar Lahoti, however, countered arguments that a 4 per cent spectrum levy would distort the market or deal a blow to terrestrial players such as Reliance Jio and Bharti Airtel.
Satcom services, when available, can play a role in taking connectivity to areas where telecom networks are not available. They also play a critical role in disasters, in rescue and relief operations.
Earlier this week, Starlink got a Letter of Intent for the start of its services. It now has to procure a licence before starting services in India. SpaceX has already tied up with rivals Reliance Jio and Bharti Airtel to bring Starlink’s broadband internet services to India.