Will satellite broadband services truly be a game-changer?

India is 48 per cent short in terms of broadband penetration today, even after 25 years of terrestrial mobile services. If we continue to behave the way we are (blocking the entry of new players), we will remain in this state for another 25 years and Viksit Bharat can go out of the window,” says Debashish Bhattacharya, Senior Deputy Director General, Broadband India Forum (BIF).

“What they want is that existing operators pay for this spectrum through the nose, invest a lot of Capex but the new operator should be given a red carpet, free spectrum to start competing. This kind of a demand should not have come from them,” says Ravi Gandhi, a regulatory executive with Reliance Jio.

The race to provide satellite broadband connectivity in India is leading to some fiery exchanges. Gandhi and Bhattacharya were but two of the voices heard during the Telecom Regulator of India’s (TRAI) Open House Discussion in November. The heated discussions were over the spectrum allocation for satellite-based communication (satcom) services.

There are a whole set of other discussions too on satcom starting from cost, pricing, spectrum allocation to even voices asking about whether it is really viable.

Answer to digital divide
On the need for satcom, Lt Gen AK Bhatt (retd), Director General, Indian Space Association (ISpA), says, “It can overcome the digital divide in difficult geographies where the cost of putting fibre is too high. Satellites are like fibre in space. In urban areas, it is useful for backhaul services, for additional capacities.” Satcom technology connects various points on Earth using the satellites orbiting in space, because of which it is able to reach remote hinterlands of the world.

Feelings run high on the issues of spectrum allocation because of the enormous investments that have gone in. A 2023 KPMG report stated that satcom had reached a valuation of $2.23 billion and was predicted to reach $20 billion by 2028. Even legacy telcos like Bharti Airtel Ltd referred to the “lakhs of crores of rupees” of investment made by them over the past three decades. It is this investment that has made the legacy players push for auction of spectrum, citing concerns of an uneven playing field and undue advantage to new players like Elon Musk’s Starlink or Amazon’s Kuiper.

Meanwhile, those against the idea of auction point out that world over spectrum is authorised by the administrative method. For now, the government appears to be leaning in favour of allocating spectrum. Yet, it is worth asking whether the technology deserves all the fanfare. Even Sateliot, one of Spain’s first satellite operators to offer IoT, has been working since 2018 and is hoping to go commercial only in 2025.

In the US, companies like AT&T state that satellites can complement the existing terrestrial services but not work in isolation. As it explained in an investor call, “For a customer to only use satellite-based service, one needs enough satellites in space that are engineered with that amount of radio frequency. Also, the antenna array of those satellites needs to be large and strong enough to ensure the level of service a customer expects. The cost per bit is also very high currently to make it operationally viable.” Hence, AT&T plans to offer satellite as a complementary to fiber/wireless service. AT&T has so far launched five commercial satellites called BlueBirds.

Use cases and potential
Back in India, Forrester Research has stuck its neck out and said that satcom may be dead by the time it arrives in 2025, stating that while many companies are warming up to the idea of satcom, they will be hard pressed to compete in terms of pricing.

“Considering the 5G coverage in India is widespread, the space we have for satellite coverage to grow is very limited… In Kenya, when Starlink launched, it struggled to get any customers. In one or two years, they got around 4,500 customers. In India, customers are equally pricey. It’s very difficult for something like this to grow,” explains Ashutosh Sharma, Vice President and Research Director at Forrester.

However, Pranav Roach, President of Hughes Network Systems India Ltd, disagreed with this prediction stating that even in the US satellite still accounts for 20-25 per cent of the network utilisation. “From a consumer point of view, availability increases tremendously. So there will be a significant uptake for satcom. But it will coexist with other technologies. Technical feasibility and cost is a function of the options available and what you need to do in an emergency. Right now, we’re still waiting for rules from TRAI for spectrum allocation. Once that comes out, we can determine the cost and prices,” Roach said.

Similarly, Sateliot noted that satcom as an affordable solution could prove to be a game-changer for India. Mariona Pazos Rovira, Sateliot’s Regulatory Affairs Department said that India ranks among Sateliot’s top five countries in signed orders. However, in terms of challenges, Rovira admitted that the satellite industry in India is somewhat difficult to enter due to the lack of a framework beneficial for foreign satellite operators. “However, this is currently evolving, and I feel it will continue to improve over the next year,” she added. Nonetheless, she said the company hoped to work in India as a commercial service by 2025 or 2026.

Despite the discussions around satellite’s potential, Mahesh Uppal, Director of Com First (India), stressed the need for India to make satcom a reality. “India’s fibre coverage is impressive but far from adequate. We need, but do not have, fibre reaching most homes. This is a huge and expensive undertaking. Satcom can provide easier access, if not comparable bandwidth. It’s yet to match terrestrial players’ economics. However there are important advances in the technology, which makes Satcom more promising. However, in the medium term, it is critical that sactom’s advantages are harnessed so that unconnected people and regions do not have to wait endlessly to benefit from the power of broadband internet technologies,” he said. The Hindu businessline