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Reliance Jio has written to the Telecom Regulatory Authority of India (Trai) requesting a review of a consultation document on satellite spectrum issued last month, claiming that it violated the telecom department's terms of reference, which required an equal playing field with terrestrial networks.
According to the letter, the consultation paper has completely overlooked the critical issue of ensuring level-playing field between satellite-based and terrestrial access services. Therefore, stakeholders will not be able to adequately consider and provide relevant inputs to Trai, undermining the fairness of recommendations and the Government of India's intent to promote balanced competition, Jio said.
"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.
It further stated, "Stakeholder input on both auction and administrative assignment methods should remain open, with due consideration given to competitive fairness."
In a diverging view, Shivaji Chatterjee, CEO, President and Managing Director - Hughes Communications India spoke to Voice&Data. He said,"The debate over whether auction or allocation is the right model for satellite spectrum is often framed incorrectly. There's a misconception that auctioning implies higher costs, while allocation or assignment suggests lower costs. This narrative is misleading. Satellite spectrum, both in India and globally, is assigned because it operates on shared frequencies. The challenge is, how can you auction something that's shared? It's like Wi-Fi in homes—everyone uses the same frequency, and yet each home coexists without interference. Auctioning something like this would be impractical."
He further stated, "The key issue is that the reason for assignment isn't widely understood. Spectrum is assigned because it is shared, not because it's free. In fact, companies pay 4% of their revenue for using satellite spectrum, which is more than the 3% license fee. So, assignment isn’t a cost-free option—it involves a revenue share. Auctioning shared resources, whether it's spectrum, airwaves, or roads, doesn't make sense because these resources are meant to be used collectively.
The Department of Telecommunications (DOT) has already deliberated this and included it in the telecom act, which was passed last year. The DOT has only asked the Telecom Regulatory Authority of India (TRAI) to determine how to charge for spectrum use, whether based on megahertz, site usage, or revenue share. There is no question of auctioning. The conversation should focus on how to charge for these services, not on auctioning them."
"Additionally, the regulatory framework at the highest level has already been established, so revisiting this topic seems unnecessary. Some might argue that because Reliance is involved, this discussion is gaining attention. However, whether Reliance uses satellite frequencies for its business or for mobile services, it can do so under the current regulatory purview. This matter is already resolved by law, and there’s no need to rehash it.
The key points are, first, there’s a technical reason why spectrum is assigned and not auctioned; and second, a law has already been passed on this. Discussing it further doesn’t serve much purpose," Chatterjee added.
In his view, "when comparing satellite-based services to terrestrial services, it's clear that satellite services are significantly more expensive. The mobile business in India generates approximately INR 150,000 crores in revenue, while satellite services generate less than INR1,000 crores. Terrestrial technologies already cover 99% of the population, leaving satellite services to cater to the remaining 1%, often in remote areas where terrestrial services cannot reach. Thus, satellite and terrestrial services aren't in competition—they are complementary, like comparing planes and cars. Planes serve long distances for select individuals at a premium, while cars and trains cater to different segments and purposes.
Ultimately, the government's role is to support various technologies and let the market and consumers decide which one to use. Different services have different characteristics, and it's not about applying the same rules across all technologies. The market dynamics will naturally balance out based on consumer needs and economics."
Background
Jio has contended that satellite communication services are direct competition to terrestrial services and, thus, spectrum should be auctioned. However, the First Schedule, which exempts the spectrum needed for the service to be sold through auction, has been applied to satellite broadband communications under the new telecom law.
Satellite communications companies have supported direct allocation outside of auction on a number of reasons, including international precedents. These companies include Elon Musk's Starlink, Amazon's Kuiper, and Bharti-backed OneWeb Eutelsat.
The new telecom law stipulates that auctions are the default way of assigning spectrum for commercial services, Jio claimed that the consultation document had tilted towards administrative spectrum allotment.