Satcom: DCC Allows Satcom Operators to Provide Backhaul to Telcos

Today, the Digital Communications Commission, DCC, has accepted TRAI's recommendation to allow satcom operators to provide backhaul to telcos. This will help the telcos provide connectivity in underserved and unserved regions. Notably, DCC is the highest decision-making body of the Department of Telecommunications (DoT).

Big New for the Satcom Industry

A year ago, TRAI had recommended to DoT to allow VSAT operators to offer backhaul connectivity to telcos. This move would enable telcos to provide mobile services and also establish WiFi hotspots. This move would also boost connectivity in regions with weak connectivity infrastructure.

Till date, satcom operators with VSAT licences couldn’t offer satellite backhaul links to mobile carriers. The DoT only allowed NLD licence holders to provide backhaul - most satcom operators don't have this license.

However, this has changed starting today. DoT Secretary told ET, "DCC has approved TRAI's recommendation, barring on the SUC (spectrum usage charge), which needs further deliberations. This will improve the ease of doing business, reduce capex requirements, allow better mobile services to consumers in areas where it will be difficult to fiberize".

This move will allow telcos to employ satcom operators to provide backhaul for them. There are still many regions in the country where telcos have failed to provide adequate connectivity because installing ground-based equipment is either too expensive or too challenging. For the likes of Reliance Jio, Bharti Airtel and Vodafone Idea, this move will allow them to use satellites of existing VSAT permit holders like Hughes Communications. The telcos can use this capacity to provide 4G and Wi-Fi, and in future, 5G, to areas yet untouched by connectivity.

The DCC has put a temporary hold on TRAI's other recommendation to cut SUC for VSAT licensees. TRAI had hoped that this will help increase satellite proliferation in India. However, a senior official said that DCC requires more consultation on the implications of this move.

Earlier, TRAI had suggested that DoT lower the applicable SUC for VSAT permit holders to 1% of AGR, from 4% now.

Space Internet Race to Intensify in India

Right now, companies like Starlink and OneWeb are building their LEO satellite constellations, aiming to serve the world with connectivity. This move will prove vital for them to make it an economically-viable venture. Especially in India, which has fast emerged as one of the primary targets for them. These two will launch their internet-from-space service some time next year in India, too.

Satellite backhaul opens a crucial B2B opportunity for these operators, which will see their revenues soar. Sunil Mittal, OneWeb Chairman, has said the company will offer its satellite bandwidth capacity to telcos for cellular backhaul in India’s remote regions. No doubt that Starlink will offer something similar.

This is one of the more important policy changes for satcom and VSAT operators. Satellite operators, both LEO and geostationary, and everything in between, will see this as all the more incentive to push for the early market capture in India.