Summary:
India’s Digital Communications Commission (DCC) has approved a 5% spectrum usage charge (SUC) linked to adjusted gross revenue (AGR) for satellite communication providers, with spectrum allocated for five years and extendable by two years. The decision includes a 1% charge reduction for operators serving designated remote areas and could bring India closer to launching commercial LEO and MEO satellite broadband, although further regulatory and security approvals remain. Satellite operators will also pay an annual 8% AGR licence fee, while companies such as Starlink, Eutelsat OneWeb and Jio Satellite have already received GMPCS authorisation from the DoT.
The Indian government has cleared an important regulatory step after the Digital Communications Commission (DCC), the Department of Telecommunications’ (DoT) key decision-making body, approved a spectrum usage charge (SUC) of 5% of adjusted gross revenue (AGR) for satellite communication service providers, according to a media report. Under the new framework, satellite spectrum will be assigned for five years, with an option to extend the allocation by a further two years. The DCC has also approved a 1% reduction in the spectrum charge for providers operating in government-designated difficult-to-connect and remote regions. The move is aimed at encouraging satellite operators to serve areas where low-Earth orbit (LEO) and medium-Earth orbit (MEO) satellites can offer better coverage than terrestrial networks.
The decision differs from the Telecom Regulatory Authority of India’s (TRAI) recommendation of a 4% AGR-based SUC, with a minimum annual charge of INR 3,500 (US$36.66) per MHz. The government has also declined TRAI’s proposal for an additional INR 500 ($5.2) per subscriber for services provided in urban areas.
The proposal must still complete the remaining stages of the government approval process before spectrum can be assigned for commercial use. The decision could move India closer to the commercial introduction of LEO and MEO satellite broadband services, although operators will continue to require other regulatory and security clearances.
The commercial launch of satellite services in India has faced prolonged delays. Satcom operators are still waiting for security approvals, while uncertainty has continued over the conditions governing spectrum allocation to satellite service providers.
Importantly, satellite companies will be required to pay both the SUC and an annual licence fee equivalent to 8% of AGR. These charges could affect the financial viability of satellite broadband services, particularly in rural and remote locations where returns on investment may take longer to emerge.
The DCC’s decision is notable because spectrum allocation has remained one of the key regulatory issues delaying the commercial deployment of satellite broadband services in India.
Several companies, including Starlink, Eutelsat OneWeb and Jio Satellite, have already secured Unified Licence authorisation from the DoT for Global Mobile Personal Communications by Satellite (GMPCS) services. Amazon Leo, formerly known as Project Kuiper, is also seeking to enter the Indian market but is still awaiting the required authorisation. Other potential entrants, including Singtel, are also looking to participate in the market.
India offers considerable potential for satellite broadband providers because large sections of the population live in remote or difficult-to-reach locations where terrestrial networks can be challenging to deploy. However, the government has expressed concerns that satellite operators could prioritise urban and higher-income customers instead of focusing on areas where satellite connectivity could deliver greater social and economic benefits. Security considerations also remain, including concerns related to the use of Starlink terminals during the ongoing conflict in the Middle East.
