Sky wars: India’s satellite spectrum battle heats up

While Airtel and R-Jio are gearing up to launch satellite Internet services in India, the country’s satellite spectrum allocation saga is far from over

On 27 October 2023, standing at the keynote stage of the India Mobile Congress in Delhi, Sunil Bharti Mittal, chairman of Airtel’s parent firm Bharti Enterprises, made an announcement that wasn’t entirely expected. “By next month, we will be launching OneWeb’s satellite Internet services,” Mittal said.

“Satellite spectrum is more akin to shared common resources like air, water, and roads and it is unfeasible and impractical to consider auctioning it.” - TV Ramachandran, President, Broadband India Forum

Airtel, though, was beaten to the stand by cross-industry rival, Reliance Industries’ Jio Infocomm. Earlier on the same day, Jio chairman, Akash Ambani, announced the launch of JioSpaceFiber, which would offer the same satellite-based Internet services that OneWeb promised.

While the announcements were potentially headlining, a few eyebrows were raised as India continues to deal with the bottleneck of how satellite spectrum would be made available to its customers. How, then, did the two telecom operators, which account for nearly 81% of all Indian network connectivity customers as per the Telecom Regulatory Authority of India (TRAI)’s July 2023 report, announce a service that technically cannot be provided in the country?

THE STORY SO FAR

Satellite Internet, or satellite connectivity, isn’t exactly new. In at least limited capacities and forms, it has been present in India and around the world for a while. But things have largely flown under the radar, for the lack of a better pun.

In fact, for the longest time, access to connectivity powered by satellites was very limited. Not only was satellite access tightly regulated, it was also prohibitively expensive for most entities. As a result, barring sectors such as government affairs, defence communications and other such niche use cases, satellite services were largely unavailable and unseen to the average consumer. Also, for the longest time, the only touch point for the average Indian consumer to use satellite Internet was through in-flight Internet connectivity on a few international air routes.

All of this changed in August 2021, when the domestic space economy was liberalised. Satellite services were opened up for usage by the private sector, which had a two-part effect: companies could soon be satellite operation providers as well as satellite service users. This led to a spurt in space startups, with satellite services at the centre of it all.

However, even as the sector has been liberalised, there are plenty of challenges ahead, the biggest of which was on how private entities would get access to satellite spectrum. Given that connectivity is a government-regulated subject, the Centre needed to decide this.

Over multiple rounds of consultations by TRAI, and legal inputs on the matter by telcos and enterprises, the industry awaits a decision on how satellite spectrum will be accessed.

WHY THE DEBATE?

Typically, spectrum for terrestrial connectivity is auctioned to telecom operators by the government. Companies pick up airwaves depending on their requirement and make bulk payments to the government, often, over a certain period. This time, however, non-telecom operator companies proposed that satellite spectrum could be offered directly to enterprises, and in an allocation format that many in the industry said was the norm for when shared spectrum is involved.

In terrestrial connectivity, when the Centre auctions airwaves to telecom operators, the winning bidders get exclusive access to the spectrum in concern. Subject to the payment of spectrum usage charges, and related levies and fees, the telecom operator who won the bid for the respective spectrum would have exclusive rights of usage.

For the supplementary satellite connectivity in question here, usage of satellite Internet services would be driven by shared spectrum usage. This is done to optimise the usage of airwaves and help operators offer services despite the crowded connectivity spectrum.

This, many industry stakeholders and veterans say, is a precedent that India should follow to ensure that the same auction model that is applicable for terrestrial networks is not used for satellite spectrum.

In a Voice&Data column published in March 2023, TV Ramachandran, President, Broadband India Forum pointed out that nowhere in the world is satellite spectrum auctioned. He also shared several reasons for that. “Satellite spectrum is a shared resource unlike terrestrial mobile spectrum which can be partitioned into small or large chunks that can be exclusively allotted to particular users and therefore the latter can be auctioned,” he said.

Ramachandran further added that in the case of satellites, the entire band is used by all operators in different slots. If the band is partitioned to enable sharing, there would be a major drop in spectrum efficiencies and utilisation, which is unacceptable. He also highlighted that the satellite spectrum is more akin to shared common resources like air, water, roads, etc. and it is unfeasible and impractical to consider auctioning it.

Opinions, however, differ based on which side of the fence you are on. Both Bharti Airtel and Reliance Jio have individually submitted legal representations to the Department of Telecommunications (DoT), claiming to explain why they feel that any mode of derivation of spectrum, apart from an auction, could be “unconstitutional”. In Jio’s representation to the DoT, former Supreme Court judge L Nageswara Rao wrote that “natural resource allocation must only be by auction.”

The Centre, on this note, has so far held steadfast that TRAI’s ruling will be tantamount. Speaking with journalists on the sidelines of the India Mobile Congress, Union IT minister Ashwini Vaishnaw said that the issue is progressing at a steady pace but refused to offer a timeline by stating that the IT ministry does not want to put undue pressure on TRAI’s natural decision-making process.

STRING OF CHALLENGES

The first and foremost issue to this entire saga is the retirement of the TRAI Chairman, PD Vaghela, end of September. With a new TRAI chairperson due for appointment, who will become the authorised signatory for the spectrum allocation, the current roadblock is a systemic one which will only see resolution in due course of time.

Beyond that, other roadblocks include rationalising one faction of the industry, versus the other. The Centre does not want to antagonise enterprises in their quest to procure satellite spectrum, but telcos are still the mainstay for procuring spectrum and translating them into taxable, monetisable services across multiple sectors pan India. Yet, the Centre would have taken cognisance of the topic, and the notion that there have been ample lobbying for spectrum auction by telcos, instead of administrative allocation.

Apart from this, a key roadblock lies in the very core nature of the satellite spectrum, and its use cases. At present, satellite spectrum is not a consumer-facing offering, and will largely be used as backhaul for terrestrial networks, as well as in powering enterprise use cases such as in aviation and maritime communication. On this note, telecom operators will see initial limitations in proliferating the service to consumers. This is where the latest launches from Airtel and Jio come in.

With the new services, the two telcos will offer the satellite-based network service as an add-on or standalone service. However, the initial cost of the satellite-based service is likely to be higher than any other terrestrial network service presently available in the country. This could pose a challenge for mass adoption.

Further, satellite spectrum wasn’t ever meant to be a mass-market solution, and even going forward, will largely play a role in filling gaps in terrestrial solutions where the latter is weak. This, in turn, automatically reduces the reach of serviceable areas within satellite networks, making them a potentially limited offering.

TERTIARY PRESSURES

Amid all this, Elon Musk, known for helming electric mobility startup Tesla and space startup SpaceX, two of the most successful so far in their respective industries, created an entity named ‘Starlink’. In May 2019, the latter started launching small satellites that would reside in an orbit that is considerably closer to the Earth, thereby called Low Earth Orbit (LEO). Musk’s vision was to create a constellation or chain of satellites that would work in relay, and cover the entire world in a web of Internet connectivity.

While this, in ways, boosted the hype around space satellite offerings, Starlink has already received regulatory clearance to offer its services in India. Media reports also indicate that Jeff Bezos and Amazon-backed satellite Internet service, Project Kuiper, has also recently applied for a regulatory satcom licence in India, and could launch its services as early as the end of next year.

This is not all. While enterprises are slated to become the primary customers for satellite Internet services, tech and networking expenditures by companies across verticals have steadily declined, as the September quarter’s IT earnings showed. This suggests that if tech spending remains low, most initial deployments of satellite Internet services could be pilots or early-stage expressions of interest at best. Large, multi-million-dollar deployments, in this regard, could be deferred for the upcoming quarters, which means that even if spectrum auction or allocation clearance is given by the end of this year, adoption of the service could remain limited.

The initial cost of the satellite-based service is likely to be higher than terrestrial network service, posing a challenge for mass adoption.

With limited initial market scope, plenty of competition, high costs, and stuttered confusion regarding spectrum auction or allocation at hand, India’s efforts to liberalise and open up satellite connectivity for all are seeing a shaky start at best. While companies remain bullish on a potentially large market size, none of the challenges are frivolous, and definitely cannot be overcome in a blink.

By Vernika Awal

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