The Telecom Regulatory Authority of India on Friday laid the groundwork for the rollout of satellite-based Internet services in the country, by releasing its long-awaited recommendations that levies a 4% adjusted gross revenue (AGR) charge on satellite communication companies such as Starlink, Eutelsat OneWeb, and Jio Satellite. The regulator has also proposed a five-year validity for satellite spectrum, extendable by two more years.
The Trai recommendations come just two days after the government issued a letter of intent to Starlink, signaling imminent commercial entry of satellite broadband firm in India. Other players like Eutelsat OneWeb and the Jio-SES joint venture are already licensed and awaiting spectrum allocation to begin services.
In its recommendations, Trai suggested that satellite operators pay spectrum charges equivalent to 4% of their AGR, along with an additional 8% AGR as licence fee, terms that are higher than what companies like Starlink and Amazon’s Kuiper Systems had urged for. During the consultative process, these firms had pushed for a spectrum fee of less than 1% with minimal or no other levies.
Additionally, Trai has introduced a floor on spectrum charges, recommending a minimum annual payment of Rs 3,500 per MHz for firms providing either fixed or mobile satellite services. If 4% of AGR yields a lower amount, this base fee would still apply. The idea behind the floor rate is to ensure that the government secures a minimum revenue regardless of a company’s revenue scale.
To address the risk of companies focusing on lucrative urban markets, Trai has also proposed an added fee of Rs 500 per urban subscriber annually for fixed satellite services. This aims to encourage service providers to cater to underserved and rural areas as well.
While terrestrial telecom operators obtain spectrum through competitive auctions, satellite service providers will be allocated spectrum administratively for five years. They won’t be required to make any upfront payments, a move justified by Trai as essential given the current stage of the satellite broadband industry and the short operational life cycle, roughly five years, of low-earth orbit (LEO) satellites.
Trai chairman Anil Kumar Lahoti emphasised that satellite services are expected to complement terrestrial networks, rather than compete with them. He cited data capacity limits of satellite constellations, noting that a city like Delhi, with an estimated 5 million broadband subscribers, far exceeds what any satellite network could handle. A single constellation, for instance, may only support around 20,000 users.
Given this dynamic, the regulator ruled out pricing satellite spectrum on par with terrestrial services. Instead, it recommended that the spectrum be offered on a shared, coordinated basis across various bands like C, Ku, Ka, Q/V, and L&S, to ensure optimal utilisation without conflict among service providers.
The regulator also highlighted the need for spectrum users to cooperate in managing shared frequencies, and advised the government to allow satellite earth station gateways in remote, sparsely populated areas, such as those designated for frequencies like 27.5-28.5 GHz and 42.5-43.5 GHz, where there is minimal overlap with mobile telecom services. The department of telecommunications (DoT) has been urged to establish exclusion zones to prevent interference between satellite and terrestrial networks.
To support the rollout in remote regions, Trai has recommended government subsidies for user terminal hardware, which can cost between Rs 20,000 and Rs 50,000. These could be disbursed either directly to users through DBT (direct benefit transfer) or to service providers via the Digital Bharat Nidhi fund.
The regulator wants spectrum charges to be paid quarterly and expects a minimum fee to be remitted at the start of each year. Gateway installations are to be completed within 12 months of receiving permission, ensuring timely infrastructure deployment.
Industry players have broadly welcomed the framework. The Indian Space Association (ISpA), which represents companies like Hughes, OneWeb, and Nelco, noted that the recommendations strike a balance between ensuring affordability for users and safeguarding government revenue.
With these guidelines now in place, the next step lies with the DoT, which needs to accept it either in full or make modifications to it and maybe seek Cabinet’s approval, after which the spectrum allocation process would be initiated.