Satellite spectrum debate sparks divide in telecom industry

The debate over satellite spectrum allocation has highlighted differing perspectives within the telecom industry, with contrasting views on how the spectrum should be managed. A consultation paper issued by the Telecom Regulatory Authority of India (TRAI) has sparked discussions on whether satellite spectrum should be auctioned or assigned administratively, with key players raising concerns about the impact on competition and fairness in the market.

Some industry players have raised concerns that the consultation document does not sufficiently address the need for balanced competition between satellite and terrestrial networks. They argue that the current process may hinder stakeholders from providing fully informed feedback, potentially leading to recommendations that are open to legal challenges. These concerns centre around the belief that a level playing field is crucial for maintaining fairness in the market.

Diverging Views on Spectrum Allocation

Reliance Jio has raised concerns about the consultation paper, stating that it does not meet the Department of Telecommunications (DoT) requirement to ensure competitive equality between satellite-based and terrestrial networks. According to a letter from Jio to TRAI, the paper fails to adequately address this issue, preventing stakeholders from offering informed input. Jio argued that this oversight could lead to legal challenges and compromise the fairness of TRAI's recommendations.

"This deviation leaves the consultation paper and the resulting recommendations open to legal challenges, especially since it ignores the concerns mentioned in the DoT's reference, like guaranteeing fair competition," the letter stated. Jio also stressed that both auction and administrative assignment methods should be considered to ensure competitive fairness.

In contrast, Shivaji Chatterjee, CEO, President, and Managing Director of Hughes Communications India, disagreed with the notion of auctioning satellite spectrum. In an interview with Voice&Data, Chatterjee argued that auctioning satellite spectrum would be impractical because it operates on shared frequencies, much like Wi-Fi. He explained that spectrum is assigned, not auctioned, because it is shared across users, and auctioning such a resource would be counterproductive.

"There’s a misconception that auctioning implies higher costs while allocation suggests lower costs. This narrative is misleading," Chatterjee said, noting that companies using satellite spectrum already pay a 4% revenue share, which exceeds the 3% license fee for terrestrial spectrum users. He further highlighted that the DoT has already addressed this issue in the telecom act passed last year, which excludes satellite spectrum from auctioning and instead suggests charging based on usage.

Chatterjee added, "The regulatory framework has already been established, so revisiting this topic seems unnecessary. The focus should instead be on determining the method for charging spectrum use."

The debate reflects the fundamentally different roles that satellite and terrestrial services play in the telecommunications ecosystem. According to Chatterjee, satellite services primarily cater to remote areas where terrestrial networks cannot reach, covering less than 1% of India's population. He noted that the mobile sector in India generates INR 150,000 crores in revenue, compared to less than INR 1,000 crores from satellite services, indicating the complementary nature of the two technologies rather than direct competition.

 International Precedents and Broader Implications

Jio’s argument is grounded in the belief that satellite services compete with terrestrial networks; therefore, the spectrum for these services should be auctioned. However, the First Schedule of the new telecom law exempts satellite spectrum from auction. This provision has garnered support from international satellite communications companies such as Elon Musk's Starlink, Amazon's Kuiper, and Bharti-backed OneWeb Eutelsat.

The ongoing debate illustrates the complexities of regulating the spectrum in a rapidly evolving digital economy. While some favour auctions as a method to ensure fair competition, others, like Chatterjee, argue that assigning shared resources through administrative methods remains the most practical and effective approach.