Has Starlink done a Jio on Jio?

Starlink is on the verge of starting operations in India, which will disrupt and change the way mobile internet connectivity has been offered for the next several decades. It is nowhere close to what the Indian operators have been pushing for. Elon Musk did not pour in USD130 million into a pro-Trump campaign effort for nothing!

Jio and the other telcos may have to rework their strategies and find ways around their anger, disappointment, and frustration.

Disruption at another level altogether?

Minister Scindia. The spectrum for satellite broadband will be allocated and not auctioned, reiterated Jyotiraditya Scindia. Union Minister of Communications in a recent interview.

To be fair, the minister has said this every time he has been queried on the subject. The satellite broadband spectrum will not be given free and TRAI will fix a price for the resource. “Every country has to follow the International Telecommunications Union, which is the organisation that lays out the policy for spectrum in space or satellites, and the ITU has been very clear in terms of the spectrum being given out on an assignment basis. In addition, if you look across the world today, I cannot think of a single country that auctions spectrum for satellite,” repeated Scindia. “The regulatory process is very clear and transparent,” he added.

The Telecom Act of 2023 passed in December has put the matter in ‘Schedule 1’, which means that the satcom spectrum will be allocated administratively. “…and therefore, we are open to looking at the application of any entity that wants to invest in India at this point in time. I think only one or two licenses have been given out. And whoever else wants to participate, India is surely going to welcome that,” the minister said.

Musk’s Starlink and Amazon’s Kuiper have been vocal that they back an administrative allocation. Jio and Bharti Airtel have expressed that giving away the satellite broadband airwaves at a pre-decided price by the government will create an uneven playing field since they had to compete in an auction to get spectrum for their terrestrial wireless phone networks.

Bharti Airtel and Reliance Jio are pushing for a restricted validity on the assignment of spectrum proposing an initial period of three-five years that will facilitate an early launch of services.  Airtel, which had been pushing for administered pricing of spectrum until recently has also proposed a dual strategy: Auctioning spectrum in urban areas while administering it in underserved, remote regions where connectivity needs are most pressing. RJio has advocated for auction-based spectrum allocation. The telco has suggested two alternatives: If auctioned, spectrum should be assigned for 20 years. Alternatively, in the case of administrative assignment, Jio recommends a maximum three-year term, including the roll-out period, followed by a reassessment by the Department of Telecommunication under Section 4(5)(a) of the Act before any spectrum is reassigned.

Starlink and Kuiper have urged the regulator to allocate shared spectrum for a standard 20-year term in line with terrestrial licenses. They emphasise the need for a longer validity to ensure the financial viability and scalability of satellite broadband services. “A shorter period of validity, will force the satellite broadband industry to focus on the short term by prioritising the recouping of costs as quickly as possible” thus diminishing focus on affordability at scale,” says Starlink.

Other players show interest too. Besides Starlink and Project Kuiper, other international companies like Rivada Networks, Viasat, Sateliot, Telesat, and Globalsat have shown interest in India’s satcom market. These companies have appealed to TRAI for regulatory reforms and lower spectrum charges to facilitate market entry, aiming to make satcom services more affordable.

Regulator. The Telecom Regulatory Authority of India is considering a significant change that could require satellite communication providers to go through a new application and approval process before launching their services. While companies currently hold licences for satellite-based broadband, a recent TRAI consultation paper has sparked debate over whether separate authorisations should be required for various satcom services, specifically for satellite earth station gateways. This move, aimed at clarifying and potentially strengthening regulatory oversight, could impact both established providers and new entrants in India’s growing satcom market.

At present, there is no clear indication as to whether existing licence holders would automatically qualify for new licenses or would need to restart the application process. In response, the department of telecommunications (DoT) requested that the regulator consider separate authorisations specifically for satellite communication. The final decision on satcom service authorisations will now depend on stakeholder feedback gathered from TRAI’s consultation process.

Both Starlink and Project Kuiper have faced obstacles in obtaining the GMPCS licence, largely due to challenges in meeting India’s mandatory ownership disclosure regulations.

At the recently held Open House Discussion conducted by TRAI, the stakeholders pushed their points of view to the regulator. They made their submissions on issues such as pricing, period of assignment of satcom spectrum, frequency bands, roll out obligations, and other nuances. The discussions went on for over six hours.

Some excerpts.

Ravi Gandhi, President & Chief of Public Policy and Regulatory, Reliance Jio.
“We are working in a hyper-competitive market. We are not afraid of competition. It is the other way around actually. The entities which want to be in this space via satellite, in the telecommunication space via satellite, are afraid of competition, and that’s why they want all this kind of protection and get spectrum for free. A level playing field is what we are seeking, with same terms and conditions, and same spectrum pricing . If the government decides not to auction spectrum for satcom, they can auction the licence – as was done in 2001 when licence was auctioned, and spectrum was given on administrative basis for mobile services.”

Parnil Urdhwareshe, Director, Starlink Satellite Communications

“These intelligent Indian consumers that want satellite broadband services have the right to choose an operator who will provide them with an affordable, high-quality service. In our experience, over 113 markets as of today, users always choose satellite broadband when they lack other options for reasons of coverage or reliability or affordability. And we think all of these users have an equal right to crossing the digital divide. A false distinction between their lack of connectivity versus traditional use cases is fundamentally against any goals of universal access, which is really the point of services such as Starlink.

All satellite operators should be able to serve any user who requires their services across India rather than distinctions being created based on their preferred markets. Users choose Starlink because their current options are unavailable, unreliable or too expensive. Some commentators are explicitly arguing that those users should continue to be stuck with services that either don’t exist or are too unreliable or are too expensive. The justification of administrative assignment is techno-economic that satellite spectrum is shared and enforcing an exclusionary auction mechanism makes entire satellite ecosystem worse off. I want to very quickly touch on unfortunate and entirely false allegation of possible predatory pricing by next-generation systems. Debunking this is thankfully very easy. We encourage TRAI and all interested participants to simply look at Starlink’s operations in any of the 113 markets we are live in today, we maintain absolute transparency on Starlink pricing and performance around the world.”

Rahul Vatts, Chief Regulator Officer, Bharti Airtel
“Creating a level-playing-field is crucial for the balanced growth of the entire ecosystem. So while it is important to encourage satcom services in traditional markets and traditional use cases, it is equally important to safeguard significant investments made to the tunes of lakhs of crores of rupees by terrestrial operators over past three decades.

Satcom should be encouraged to serve traditional markets, traditional use cases, including backhaul, the defense use, including the government use, and to areas which are completely unconnected and therefore driving the adoption of satcom must also go hand-in-hand with ensuring that we ensure a healthy competition and a level playing field with other ecosystem players.

The price of satellite spectrum has to be in a manner that it ensures a level-playing-field and competitive issues are addressed. Also as terrestrial operators, we are subject to a lot of privacy and security conditions and guidelines, and there have been cases in the past where some countries have experienced satcom services being used to deliver messages, propaganda, etc. Security and level playing conditions should also be ensured while framing norms for satcom services.”

Kopal Shrivastava, who leads Public Policy for digital devices and connectivity at Amazon India

“Spectrum management fee should be based on the percentage of AGR, and by “adopting a spectrum charge of less than 1 per cent of AGR. Spectrum assignment should be co-terminus with the license, and under the mechanism, TRAI should establish a spectrum assignment period of 20 years or till expiry of license, whichever is earlier.”

Backgrounder. India’s satcom sector is positioned for rapid growth, with projections estimating it could reach a value of $20 billion by 2028. Currently valued at $2.3 billion, India ranks fourth globally in terms of satcom investment, with nearly $2 billion invested across 110 domestic firms, according to KPMG. The recent opening of the sector to private players has spurred innovation and competition. As India considers allocating spectrum administratively rather than via auction, international players are increasingly attracted to the market, which is expected to heighten competitiveness.

Given India’s diverse geography and the fact that around 25 percent of the population lives in areas unreachable by traditional terrestrial networks, satcom technology offers a viable solution to bridge the digital divide. By extending digital connectivity to underserved regions, satcom can play a pivotal role in connecting remote and rural areas.