In Short:
Telecom Minister Jyotiraditya Scindia announced that satellite spectrum in India will be allocated administratively, but there will still be costs involved. The pricing will be determined by the Telecom Regulatory Authority of India (TRAI). The allocation method aligns with global practices, but there’s disagreement among telecom companies. Reliance Jio advocates for auctioning the spectrum, while Airtel supports administrative allocation.
Spectrum for satellite services will be allocated administratively; however, it is important to note that this allocation will not be free of cost, as clarified by Telecom Minister Jyotiraditya Scindia during a recent press briefing at the India Mobile Congress.
Cost and Allocation Formula
The Telecom Regulatory Authority of India (TRAI) will determine both the cost of the spectrum and the formula for its allocation. Minister Scindia stated, “There is a paper that has already been circulated by TRAI, and that regulatory authority has been empowered by the constitution to decide what administrative prices are going to be. I am very confident that they will come up with the best prices to be adopted, provided they are under administrative demand.”
Framework Established by Telecom Act 2023
The recently passed Telecom Act 2023 clearly stipulates that satellite communication (Satcom) spectrum will be allocated via an administrative route. The minister emphasized that globally, satellite spectrum is often allocated through administrative means, making India’s approach consistent with international practices.
Challenges of Spectrum Pricing
Minister Scindia elaborated, “Satellite spectrum is shared spectrum. If spectrum is shared, how can it be priced individually? There are numerous factors that influence that decision, which is why countries globally have adhered to this methodology, and India is following suit.”
Industry Perspectives
In comments made earlier in the day, Bharti Airtel Chairman Sunil Mittal expressed that the Satcom sector should be governed by the same regulatory framework as the telecom sector. He stated, “Satellite firms looking to serve urban premium markets should obtain telecom licenses and buy spectrum under the same conditions as telecom operators. This simple solution can be applied worldwide.”
These remarks follow a letter from Reliance Jio, India’s largest telecom operator, to the TRAI, advocating for the auction of Satcom spectrum. The ongoing debates surrounding the allocation of satellite spectrum have surfaced disagreements between Reliance Jio and other Satcom entities. Last week, Jio urged TRAI to revise its consultation paper on satellite spectrum, arguing that it failed to address the crucial issue of establishing a level playing field between satellite and terrestrial networks. Additionally, Jio expressed concerns regarding the regulator’s preference for administrative allocation, pushing for an auction-based approach. Meanwhile, Airtel has previously supported the administrative allocation of Satcom spectrum.
