TRAI recommends 4% of revenue plus Rs 500 per subscriber as spectrum fee for satcom operators

New Delhi: Telecom regulator TRAI on Friday released its recommendations on pricing of spectrum to be given for satellite-based internet services, suggesting a levy of 4 per cent of annual revenues as fee on operators like Elon Musk's Starlink.

Operators offering services in urban areas would have to shell out an additional Rs 500 per subscribers annually, TRAI said in its recommendations to the Department of Telecommunications (DoT).

No additional levy would be applicable for services in rural areas.

The Telecom Regulatory Authority of India (TRAI) recommended that satellite broadband spectrum be allotted for five years, which can be extended by another two years.

The 4 per cent of adjusted gross revenue (AGR) spectrum charge would be for both geostationary orbit (GSO) and NGSO (non-Geostationary orbit) operators. These would be subject to a minimum annual spectrum charge of Rs 3,500 per MHz.

Releasing the recommendations, TRAI chairman Anil Kumar Lahoti said satcom services once available can play a vital role in taking connectivity to underserved areas where telecom networks are not available. They also play a critical role in disasters, in rescue and relief operations.

Starlink earlier this week got a Letter of Intent (LoI) for the start of its services. It now has to procure a license before starting services in India.

SpaceX, the aerospace company led by Elon Musk, has already tied up with rivals Reliance Jio and Bharti Aitel to bring Starlink's broadband internet services to India.

Both Indian firms will offer Starlink equipment through their network and also support customer installation and activation on devices.

Over the past few months, rivals Jio and Airtel had come together to demand an auction for awarding spectrum for satellite services in India. Musk on the other hand lobbied for administrative allocation as per international norm.

In October last year, the government sided with Musk on the issue of allocating airwaves, to be used for offering low latency internet services using satellite, at a pre-decided price through administrative route.

Both Jio, India's largest wireless carrier, and Airtel, the No 2 player in the world's most-populous nation, where data usage is rapidly rising, feared lower entry cost will chip away some of their subscriber base.

Based on the recommendations of TRAI, the DoT would now go to the Cabinet for pricing of satellite spectrum and once approved any satcom wanting to offer services in India can apply.

Starlink is the world's largest Low-Earth-Orbit (LEO) constellation operated by SpaceX.

Bharti already partners with Eutelsat OneWeb, the second largest LEO constellation.

Similarly, Jio Platforms has a joint venture with SES, a leading global satellite-based content connectivity solutions provider.

Jio Space Technology Ltd, where Jio holds 51 pr cent and SES 49 per cent, is to use multi-orbit space networks that is a combination of geostationary (GEO) and medium earth orbit (MEO) satellite constellations capable of delivering multi-gigabit links and capacity to enterprises, mobile backhaul and retail customers across the length and breadth of India and neighbouring regions.

Eutelsat OneWeb, in which Airtel is the single-largest shareholder with a 21.2 per cent share, and Jio's joint venture with SES have already secured GMPCS licenses and IN-SPACe approvals.

Starlink currently operates over 6,000 LEO satellites, while Amazon’s Kuiper project plans to deploy 3,236 satellites starting in early 2025.