DoT downplays concerns of telcos on satcom

New Delhi: The Department of Telecommunications (DoT) has downplayed concerns raised by telcos, particularly Reliance Jio, on recommendations for satcom spectrum pricing given by Telecom Regulatory Authority of India (Trai).

Officials told ET Jio had written to the DoT in June, highlighting its concerns over Trai’s spectrum pricing recommendations, saying it’s too low.

While the department will be asking Trai to reconsider the proposals, it feels that in the near to medium term, satcom providers won’t be big enough in terms of subscribers to compete or eat into telcos’ fixed broadband revenues.


“The satcom service providers can have around 2-3% share in the fixed wired broadband market in the near to medium term basis the capacity they have filed with space regulator IN-SPACe,” said an official on condition of anonymity.

As per an analysis done by DoT based on the current capacity filed with space regulator, in near and medium term, satcom can serve around 1.2 million broadband connections while there are already 44 million fixed broadband users in India.

However, to have regulatory clarity for the future when satcom will be big due to advancement in technology, the DoT wants to put regulations in place, so that all players are treated fairly.

A query sent to Reliance Jio remained unanswered at the time of going to press.

“We have studied the recommendations holistically and are seeking clarifications on a number of proposals,” a second official said.

Trai in its recommendations on the allocation of satcom spectrum had proposed the airwaves be given administratively for a period of five years, to be extended by another two years. On pricing, the regulator had recommended charging 4% of adjusted gross revenue (AGR) as the fee, without any upfront payment.

The DoT, however, believes the conditions can be revised even before five years, in case of new technology or if the spectrum is used for other services, in addition to data and internet.

ET had earlier reported about DoT’s decision to refer back Trai recommendations for clarifications.

The proposals going back include charging urban consumers an additional Rs 500 for satellite broadband connection and the annual spectrum fee that a satcom firm has to pay to the government. In terms of pricing, the department also wanted to know how to treat internet-of-things devices in terms of spectrum charges.

The regulator has said the additional levy on urban consumers would help incentivise the satcom firms to offer services in rural areas.

DoT, however, believes that this fixed charge of Rs 500 for urban areas needs to be re-examined based on the overall expected pricing of satcom services for desired results.

Other proposals that were referred back include the use of the Digital Bharat Nidhi (DBN) funds to subsidise satellite terminals. The regulator had proposed to disburse subsidy from the DBN, either as a lump sum payment or in instalments, to fund satellite terminals that cost Rs 20,000- 50,000 in a bid to boost adoption.