Indian billionaire Mukesh Ambani’s Reliance Jio is challenging the recent conclusion by the country’s telecom regulator, TRAI, over how satellite broadband spectrum should be allocated.
The company has privately argued that the Telecom Regulatory Authority of India (TRAI) has incorrectly decided that the spectrum for satellite-based broadband should be allocated by the India government rather than through an auction, intensifying a rivalry with Elon Musk’s Starlink.
If TRAI decides to conduct spectrum auction for satellite-based broadband service, there can be more competition in the broadband market place. Spectrum auction may result into significant increase in cost for both Starlink and Reliance Jio. In India, Reliance Jio is the #1 operator in the fixed broadband. Reliance Jio has 12.86 million fixed broadband customers at the end of July 2024. This compares with Bharti Airtel’s 8.16 million and BSNL’s 4.19 million fixed broadband customers.
At the heart of the issue is how spectrum for satellite services in India will be distributed. Elon Musk’s Starlink and other global players like Amazon’s Project Kuiper have supported an administrative allocation, while Reliance Jio, India’s top telecom player, is advocating for an auction process to ensure fair competition, Reuters news report said.
Insiders say that TRAI’s current interpretation of Indian law appears to favor Elon Musk’s approach by allowing allocation without auctions, a stance that Reliance Jio disputes. In an Oct. 10 letter to India’s telecom minister, Jyotiraditya Scindia, Reliance’s regulatory affairs chief, Kapoor Singh Guliani, requested that the consultation process be restarted, accusing TRAI of “pre-emptively interpreting” the spectrum allocation as administrative rather than auction-based.
TRAI is conducting a public consultation on the issue, and the telecom regulator insists that all feedback, including Reliance Jio’s, will be considered. The recommendations will play a crucial role in determining the Indian government’s decision.
TRAI in its consultation paper said satellite spectrum is assigned through an administrative mechanism internationally. The spectrum charges are levied in the form of an administratively determined fee. In 2018, TRAI recommendation of spectrum charges at 1 percent of the AGR of BSNL’s satellite-based services was accepted by India government.
In Canada, spectrum fee is $5.22 per MHz assigned spectrum for fixed earth stations, transportable earth stations, and earth stations in motion (ESIMs) and $1,566.00 per MHz assigned spectrum for mobile earth stations ≤ 3.0 GHz.
In South Africa, the unit price per MHz paired is Rs 3,125 Rand per year.
In Malaysia, spectrum price for fixed satellite service is RM 950, while the spectrum price for mobile satellite service is RM 890.
The satellite broadband market in India is expected to grow rapidly, with Deloitte projecting a 36 percent annual growth rate, potentially reaching $1.9 billion by 2030. Elon Musk’s Starlink, which aims to expand its services in India, argues that administrative allotment of licenses aligns with global trends, but Reliance is pushing for an auction to ensure a level playing field and prevent foreign players from competing with traditional telecom services.
As India’s largest telecom company with 480 million users, Reliance Jio’s stance on the issue is seen as critical, and the outcome could shape the future of satellite broadband services in the country. The Broadband India Forum (BIF) earlier announced its support for the administrative assignment of spectrum for Satcom services.
Baburajan Kizhakedath