In a significant policy shift, the Indian government has opted to allocate spectrum for satellite broadband services instead of auctioning it. This decision aligns with international standards and benefits global players like Elon Musk’s Starlink.
The Indian government has announced its decision to allocate spectrum for satellite broadband services, marking a significant win for Elon Musk’s Starlink and similar global satellite companies. Communications Minister Jyotiraditya Scindia revealed that India would adopt an assignment-based approach for satellite spectrum, aligning with international standards set by the International Telecommunications Union (ITU). This goes against demands put forward by Indian telecom giants.
Starlink has been advocating for an administrative allocation of spectrum, where the government sets the price instead of competitive bidding. This approach, common in many countries for satellite broadband spectrum, allows companies like Starlink to enter and expand in the Indian market without the high costs associated with traditional telecom spectrum auctions.
Starlink, which has applied for a licence to operate in India, stands to benefit from the lower cost of entry. The fixed-price approach could enable Starlink to roll out services more affordably, making it easier to establish itself in one of the world’s fastest-growing internet markets.
Communications Minister Scindia emphasised that “every country has to follow the ITU, which is very clear that spectrum in space should be assigned and not auctioned,” ensuring that India’s policy aligns with global standards.
However, this decision has raised concerns among India’s telecom giants, Reliance Jio and Bharti Airtel, led by Mukesh Ambani and Sunil Mittal respectively. They argue that satellite spectrum should be auctioned to ensure fair competition, as they currently pay substantial fees for terrestrial telecom spectrum acquired through competitive bidding.
Ambani and Mittal, who are also eyeing entry into the satellite broadband sector, claim that administrative allocation might favour global companies that bypass auction costs, creating an uneven playing field.
The government’s decision is backed by India’s new Telecom Act, which classifies satellite communication spectrum under “Schedule 1,” mandating allocation rather than auction. This classification is intended to align with international norms and simplify satellite operations.
For Starlink, this decision facilitates their entry into the Indian market. With a government-determined pricing model, Starlink and other global providers can expect a more predictable cost structure, aiding their rollout plans.
India’s decision is expected to boost competition in the satellite broadband sector, with foreign players like Starlink and Amazon’s Project Kuiper seeing a clear path to market entry. This could lead to expanded internet access in underserved areas, intensifying the competition between local and foreign players in India’s digital landscape.
Top-notch SEBI registered research analyst
Best SEBI registered Intraday tips provider
Telegram | Facebook | Instagram
Call: +91 9624421555 / +91 9624461555
