Airtel vs Jio: Is satellite communication the next battleground?

From science fiction writer Art­hur C Clarke’s vision of satellite communication to the launch of Sputnik1 and, much later, Irid­ium becoming the first global satellite phone network with coverage for the entire planet, satcom has fascinated several generations around the world.

In India, satellite phones were ban­ned in the wake of the Mumbai terrorist attack of 2008, whose perpetrators were found to be using them. However, several companies are getting ready for a new wave of satellite communication in the country, a wave that will make broad­band internet accessible in the remotest corners. On the way, there are questions.

Will satellite communication emerge as the new ground for disruption in the Indian telecom universe?

Is the core battle between the big two telecom companies — Reliance Jio and Bharti Airtel — now spilling over to what was considered a fringe area till recently?

What kind of competition will the international biggies, such as Amazon and SpaceX, give to the satcom play of businesses promoted by Sunil Mittal and Mukesh Ambani?

The answers to these questions are likely to hinge on one thing: The mode of distribution of airwaves for satcom. Will it be administered allocation at a fixed price or an auction of spectrum, a scarce natural resource acquired by terrestrial telcos at an exorbitant price. That is the issue that has kept a promising sector hanging fire for some time.

Two ends of the spectrum
After a back and forth between the Department of Telecommunications (DoT) and the Telecom Regulatory Authority of India (Trai) since 2021, the satcom matter is reportedly with the highest authorities in the government now to decide on whether it should be an auction or administered allocation of airwaves. The much-awaited Trai recommendation, where spectrum distribution will be the biggest headline point, could follow in November.

The game of spectrum allocation has been upped with the traditional telcos steering the satcom show. Both Bharti Group-backed OneWeb, which is in par­tnership with French satellite major Eut­el­sat, and Reliance Jio have secured the licence from DoT for the satcom service. The international challengers, including Amazon’s Project Kuiper and SpaceX’s Starlink Satellite, are yet to get the licen­ce. Though Trai issued the consultation paper on satellite communication in April 2023 and the process of consultation ended in June 2023, the regulator has kept the stakeholders in suspense for four months.

When Business Standard approached Reliance Jio and Bharti Airtel, who are on the opposite sides of the spectrum, liter­ally, neither commented on the matter. The third incumbent telco, Vodafone Idea, which shares Jio’s view that spect­rum for satcom must be auctioned, did not comment either. But the spokes­per­son of Paris-headquartered Eutelsat Group, which is London-based One­Web’s partner, told Business Standard: “We firmly believe that both Trai and the government will take a rational view and assign the satellite spectrum administra­tively only, as is done globally.” He added that satellite communication had the potential to bridge the digital divide by covering the uncovered and remote areas, while serving the country’s disaster, maritime and defence needs.

Explaining why an auction won’t work in the case of satcom, the Eutelsat executive said satellite spectrum was a shared and non-exclusive resource and multiple satellite players could share the same spectrum, unlike the usage of terrestrial spectrum, where exclusive allocation was necessary.

There are many voices similar to Eut­elsat’s in the reply to the Trai consul­tat­ion paper on satcom. Out of 64 responses by companies, analysts, non-profit org­an­isations and individuals, 48 are aga­i­n­st the process of spectrum auction, cit­ing global norms and infeasibility of bid­ding in satcom. Only 13 favour an auct­i­on, and three have not stated a clear position.

Besides Bharti Airtel and OneWeb, all satellite companies, space associations, broadband and IT lobby groups, internat­ional majors with interest in this area, as well as companies like Larsen & Toubro and Hughes have gone against the auction route.

According to the Global Satellite Operators’ Association, satellite spect­rum is a globally shared resource. There­fore, unlike for terrestrial spectrum, exc­lusive assignment of satellite spectrum through an auction mechanism is tech­nically impractical, difficult to imple­ment, and likely to lead to fewer new satellite services and technologies.

Auction or nothing
Dismissing the arguments of the other side, Reliance Jio has sent at least two legal opinions by retired Supreme Court judges pointing to the 2G judgement as a defining precedent that spectrum can only be allocated by auction and no other method. Probably the strongest voice in favour of auctions, Jio has consistently argued that spectrum assignment rules for networks offering competing services are uniform and fair.

“Auctioning satellite spectrum therefore emerges as the sole viable strategy to guarantee a balanced comp­etitive landscape amongst competing providers,” the company said. Opposing the other camp’s argument, it has said exclusive grant of spectrum through auction will not prevent satellite earth station gateways from accessing the complete band.

Bharti Enterprise Chairman Sunil Mittal has petitioned the government that since satellite spectrum is required only in limited areas, and also since the business is not going to make billions of dollars of revenue, it should be allocated.

When asked about the Supreme Court order of 2012 mandating auction of spectrum while cancelling several 2G licences granted through first-come-first-served basis, the Eutelsat spokesperson said the court did not mandate auction as the sole method in every case. The SC verdict was in the context of arbitrary grant of terrestrial spectrum for exclusive usage, he reasoned, adding that “satellite spectrum is non-exclusive by its very nature and hence the SC order cannot be extrapolated to satellite spectrum”.

To press its point that spectrum auction has not been successful globally in satellite communication, L&T said in response to the Trai consultation paper that numerous nations had encountered setbacks. It said: “As an illustration, the UK government’s auction of the 2.3 GHz and 3.4 GHz spectrum for 5G services in 2018 failed to generate bids from promi­nent mobile operators.”

Comparable instances of unsuccessful auctions had been witnessed in countries including Australia, Germany and Switzerland, L&T pointed out. “These failures can impede the timely implementation of satellite services, fostering uncertainty for both service providers and users.”

An early believer in satcom, Bharti Enterprises Chairman Sunil Mittal had told this newspaper a few months ago that an India launch would be tough if the government decided on auction of spectrum for satcom. More recently, OneWeb announced its tie-up with Eutelsat, signalling that perhaps things were moving.

GMPCS licences have been granted to Bharti Group-backed OneWeb in August, 2021 and Reliance Jio’s satellite arm Jio Space Limited in March, 2022. It is curren­tly deliberating on whether to grant the licence to Elon Musk-owned satcom provider SpaceX, which had applied in October 2022. Amazon subsidiary Project Kuiper is expected to apply soon. Business Standard