Why DoT Rejected TRAI's Plan to Charge Extra ₹500 for Urban Satcom Users

 The Department of Telecommunications (DoT), under the Ministry of Communications, has reportedly rejected a proposal by the telecom regulator to charge urban satcom consumers ₹500 annually. The proposal was part of the Telecom Regulatory Authority of India (TRAI)’s recommendations on terms and conditions for the assignment of spectrum for satellite-based commercial communication services.

According to the Economic Times (ET), while the DoT has accepted parts of the proposal, such as no upfront payment during spectrum allocation and a 4% adjusted gross revenue (AGR) charge as spectrum fees, it has reportedly questioned the rationale behind TRAI’s suggestion of an additional ₹500 fixed annual charge per urban subscriber.

TRAI had argued that imposing a per-subscriber charge of ₹500 annually in urban areas, while exempting rural and remote regions, might incentivise operators to expand services to underserved areas.

However, DoT officials told the newspaper that introducing a fixed annual charge for urban satcom users would be difficult to implement, verify, and audit. They added that the DoT does not see how this additional fee would help improve rural connectivity. The department believes the proposed charge should be reconsidered in the context of overall satcom service pricing to achieve the intended objectives.

The telecom department is expected to send this proposal, among others, back to TRAI for review. According to ET, this will likely happen after the Digital Communications Commission (DCC) — the DoT’s highest decision-making body — takes a final call in an upcoming meeting.

It was earlier reported that the DCC is expected to meet in the second week of August to decide on TRAI’s proposal, which was first released in May 2025. At least three satcom operators — Elon Musk’s Starlink, Reliance Jio with SES, and Bharti Airtel backed OneWeb Eutelsat — already have the necessary licences and approvals to roll out satellite broadband services in India. They are awaiting spectrum allocation from the DoT.

The ₹500 annual charge was introduced to address concerns from terrestrial network operators such as Jio, Airtel, and Vi, who fear that foreign satcom providers like Starlink and Amazon’s Project Kuiper could gain an unfair advantage in areas where mobile networks are already well established. Since satcom providers would not have to pay the massive spectrum fees that telecom companies paid for 4G, 5G, and other spectrum auctions, operators argued it would leave them at a disadvantage.

No Subsidy from DBN

Another TRAI proposal reportedly dismissed by the DoT involved using the Digital Bharat Nidhi (DBN) to subsidise satellite terminals. TRAI had suggested that the government consider providing subsidies either through direct benefit transfers (DBT) to eligible subscribers in underserved or unserved rural and remote regions, or directly to service providers via the DBN fund.

“Non-Geostationary Satellite Orbit (NGSO) communication systems require a one-time hardware cost for user terminals at the subscriber’s end. The hardware cost internationally ranges between $200 and $450. Given the relatively low purchasing power of consumers in rural and remote areas, this high cost may act as a significant barrier to adoption, potentially impeding the uptake of NGSO-based Fixed Satellite Services (FSS) in such regions. Consequently, this could challenge the effective expansion of satellite communication services in underserved and unserved areas in the near term, until terminal costs fall significantly,” the proposal said.

However, according to the DoT, there is limited capacity to sanction any new projects, as the DBN is already funding initiatives to connect rural and remote regions. Moreover, its rules do not allow direct benefit transfers as suggested by the regulator.