The Telecom Regulatory Authority of India (TRAI) has issued new recommendations on spectrum usage fees for satellite-based communication services, a move that experts warn could create significant entry barriers for startups and smaller players. While TRAI aims to simplify regulation and encourage investment, the fee structure may inadvertently slow efforts to make satellite connectivity more accessible across India.
Key Elements of TRAI’s Proposal
TRAI has proposed:
- 4% of Adjusted Gross Revenue (AGR) as the spectrum fee for both Geostationary Orbit (GSO) and Non-Geostationary Orbit (NGSO) satellite services.
- An annual charge of ₹500 per urban subscriber, aimed at simplifying administration and improving ease of doing business.
Industry Reaction: Supportive Yet Cautious
T.V. Ramachandran, President of the Broadband India Forum (BIF), welcomed TRAI’s attempt to foster collaboration between terrestrial and satellite services, stating “While not making it a cakewalk for satcom, TRAI has ensured the healthy coexistence of both terrestrial and satellite-based players… Satcom and terrestrial are absolutely complementary—not competitive—and must grow together to build a fully connected India.”
However, the BIF expressed concern over the sharp increase in the AGR charge from the previously suggested 1% to 4%, and the shorter licence tenure of 5 years, compared to the 20 years that industry stakeholders had requested. Ramachandran emphasized this poses a tough environment for emerging satcom operators, who play a critical role in connecting underserved regions “This creates a challenging business situation for nascent satcom operators who are the de facto ‘lender of last resort’ for bridging the digital divide.”
Startups May Struggle to Stay Afloat
Legal expert Tony Verghese, Partner at JSA Advocates and Solicitors, noted that the increased licence fee burden could deter smaller players “Startups are unlikely to offer services at the same scale as OneWeb or Starlink. They may instead focus on niche segments and rely on the infrastructure of larger players who will bear the brunt of the fee.”
TRAI’s Justification: A Balanced Market
TRAI has defended the AGR-based model, arguing that it promotes a more sustainable and balanced ecosystem for all operators. The regulator acknowledged stakeholder concerns, particularly the potential delays in payments due to dependency on service rollout timelines and pricing strategies. Meanwhile, terrestrial service providers are reportedly still evaluating the implications of the recommendations, signalling that more industry pushback or fine-tuning may follow.
Conclusion
While TRAI’s recommendations are intended to streamline regulation and foster a robust satellite communications market, critics warn that the steep AGR charge and short licence terms may stifle innovation and hinder smaller satcom entrants—potentially compromising the larger goal of bridging India’s digital divide.
