Spectrum Showdown: Why Telcos and Satcom Firms Have Locked Horns Over Airwaves Pricing

Union Minister of Communications Jyotiraditya Scindia announced last month that the framework for spectrum allocation to satellite communication (Satcom) operators was ready for rollout. Since then, industry players have been waiting for the Department of Telecommunications’ (DoT) administrative spectrum allocation. 

At least three companies are prepared to launch satellite internet services in India and have secured all necessary approvals. These include Elon Musk’s Starlink, Sunil Mittal’s Bharti Airtel with its Eutelsat OneWeb venture, a satellite broadband company and Mukesh Ambani’s Reliance Jio in partnership with Luxembourg-based SES, a major satellite operator. 

Amazon’s Project Kuiper and Apple’s Satcom partner Globalstar have also applied for authorisations. These include the Global Mobile Personal Communication by Satellite (GMPCS) permit and clearance from the Indian National Space Promotion and Authorisation Centre. 

All eyes are now on the DoT to approve the terms and conditions for spectrum allocation recommended by the Telecom Regulatory Authority of India (TRAI) in May. According to a Financial Express report, the Digital Communications Commission, a government body under the DoT, was set to discuss these recommendations in the second week of August. Following this, the proposal would go to the Union Cabinet for approval and later be notified as government policy. 

However, The Economic Times, citing industry leaders, reported that the approval process and spectrum allocation could be delayed until the end of the year. Even before these steps are completed, industry bodies from the telecom sector, satellite operators and technology firms have been debating the pros and cons of TRAI’s recommendations. Outlook Business has compiled this debate into three themes: whether TRAI’s recommendations create a level playing field, if telecom operators face market disruption going forward and what Satcom services could mean for Indian internet users. 

Level Playing Field 

On May 9, TRAI recommended that Satcom providers pay 4% of their adjusted gross revenue (AGR) as spectrum charges rather than an upfront fee. They would also be required to pay an 8% licence fee similar to telecom companies along with an additional ₹500 per subscriber per year in urban areas.

TRAI proposed allocating spectrum to satellite communication companies for five years with a possible two-year extension and recommended the use of the Ku, Ka, Q/V, L and S bands—different ranges of radio frequencies in the electromagnetic spectrum used for satellite services. 

The Indian Space Association (ISpA), representing satellite operators such as Hughes India, OneWeb and Azista-BST Aerospace, argued that Satcom players would have preferred a more rationalised AGR rate, ideally at or below 2%. 

“Satellite operators and industry stakeholders, including ISpA, have consistently advocated for a lower AGR rate, around 2% or even less, which was TRAI's previous recommendation for Satcom. This is rooted in the need to nurture the sector at its nascent stage rather than overburden it with high levies,” Lt Gen AK Bhatt (Retd), director general of ISpA, told Outlook Business. 

 He added that unlike terrestrial spectrum used for mobile communication, satellite spectrum is a shared global resource and its charging model should reflect this. “High AGR could discourage investment and slow adoption,” he noted, while acknowledging that TRAI’s recommendation reflects a pragmatic balance of stakeholder interests. 

Broadband India Forum (BIF), representing technology players such as Amazon, Google, Hughes and Indus Towers, also raised similar concerns. In May, the BIF said that not only is Satcom’s spectrum usage charge four times higher than TRAI’s earlier recommendation of 1% but the five-year spectrum tenure is also tight. 

“This makes for a challenging business environment for nascent Satcom operators who are the de facto ‘lender of last resort’ for connecting the unconnected and underserved and tackling the sizable digital divide,” said TV Ramachandran, president of BIF. He added that the government should provide subsidies per fixed satellite user terminal in underserved areas, potentially via direct benefit transfer. 

However, the telecom industry body Cellular Operators’ Association of India (COAI) took an opposing stance in a letter to TRAI on May 29. As per PTI, COAI said, “The recommendations are based on incorrect assumptions and implementing them will impact the sustainability of terrestrial services that form the foundation of India’s digital infrastructure.” 

COAI argued that the recommendations underestimate satellite network capacity, overstate terrestrial capacity and set spectrum charges for Satcom players too low. It warned this could harm terrestrial network sustainability and accused the proposal of encouraging regulatory arbitrage. 

Earlier, COAI had also opposed the administrative allocation of Satcom spectrum. “The authorisation process must retain the contractual nature of the current licensing regime. This ensures policy and regulatory certainty, which is essential for attracting investments,” said Lt Gen SP Kochhar, director general of COAI. 

For now, TRAI has reportedly ruled out changes to spectrum charges but attention remains on whether the DoT will modify its recommendations.

Should Telecom Players Be Worried? 

Not according to Bhatt. “In India, terrestrial networks remain dominant in urban and well-connected areas due to lower costs and existing infrastructure. Satcom’s strength lies in complementing terrestrial services—reaching remote, economically unviable regions, offering resilience during natural disasters and supporting mobile and defence use cases,” he said. 

He noted that terrestrial operators such as Jio, Airtel and Vodafone Idea benefit from economies of scale in densely populated areas, allowing for much lower per-user costs. “The true value of Satcom will be in complementing terrestrial networks, especially in far-flung areas where fibre or cellular expansion is not viable,” he added. 

JM Financial, in a July 16 note, estimated that providing satellite internet across India would require capital expenditure of about ₹8,000 crore. This includes launching around 700–750 Low Earth Orbit (LEO) satellites at a cost of $1mn each, with a lifespan of 7–8 years and additional annual operating expenditure of ₹350 crore. 

The current cost of customer premises equipment—satellite dish, modem/router, indoor unit and cables—is about $400, though local manufacturing could halve this. Starlink could subsidise or lease equipment to expand into the mass market. The brokerage estimated that serving 0.1mn subscribers could cost around ₹11,250 per subscriber per month but with 2.5mn subscribers this could drop to about ₹450 per month. 

Starlink may initially target the business-to-consumer market with plans priced at $20–25 per month for early adopters, later reducing to $10 for mass adoption. It could also explore business-to-business and business-to-government opportunities. While this could pose some risk to telecom operators’ home broadband market share, these operators have also partnered with global satellite companies to offer similar services, the brokerage noted. 

However, direct-to-consumer Satcom is expected to deliver lower performance than traditional wireless services, making disruption to Indian operators’ wireless business unlikely, according to JM Financial.

Who Will Win the Satcom Race? 

Even before launch the Satcom space is crowded with traditional players such as Jio and Airtel already conducting service trials and security demonstrations. Starlink is expected to receive trial spectrum soon for compliance testing. 

Starlink has reportedly partnered with Indian Very Small Aperture Terminal providers, which are two-way satellite ground stations, to deliver services to business and government clients with plans to later enter the consumer market. Meanwhile Airtel-backed Eutelsat has teamed up with Tata Group’s Nelco to deliver OneWeb’s LEO connectivity services across India. 

According to JM Financial, Starlink’s direct-to-cell service currently underperforms traditional mobile networks though it pioneered this technology, which enables satellite broadband to connect directly to mobile phones without ground antennas. 

Starlink offers speeds of up to 200 Mbps—comparable to OneWeb’s 100 Mbps and far faster than most Geostationary Earth Orbit-based services such as Intelsat (2–5 Mbps) or Inmarsat (500 Kbps). However, LEO systems require far more satellites to maintain coverage, whereas GEO operators use fewer satellites but with higher latency and slower speeds. 

High Costs Persist 

Setting up Satcom services can cost companies about $400 (₹35,086) per user. In the US, Starlink charges around $120 per month for speeds between 40–220+ Mbps compared to Jio and Airtel’s fibre-to-the-home (FTTH) and fixed wireless access (FWA) plans which start from $5–7 for 30–40 Mbps and go up to $47 for 1 Gbps. 

Traditional satellite broadband providers such as Viasat and HughesNet offer 40–100 Mbps at $50–115 per month—still much higher than Indian broadband tariffs. Hardware costs for Starlink are also steep, $349 in the US, $244 in Canada and over $300 in Japan, France and Brazil. 

Bhatt said it is not too early to expect benefits for users from high competition. “The entry of several domestic and foreign players like Starlink (SpaceX), Eutelsat OneWeb (Bharti Airtel), Jio Space Technology (Jio-SES JV) and Amazon’s Project Kuiper along with established players like Nelco and Hughes Communications India shows the significant potential of the Indian Satcom market. This competition will ultimately benefit users though the full impact will unfold over time,” he said.