Elon Musk-backed satellite communications services company Starlink and Jeff Bezos’s Project Kuiper have written to the telecom regulator seeking 1 per cent of the annual revenues as spectrum charges. They have also sought a 20-year licence for providing satcom services.
“Indian customers and businesses can be offered even lower-cost satellite services when the spectrum chargers are correspondingly reduced to below 1 per cent of adjusted gross revenue (AGR). This would help achieve the goal to provide fast, affordable broadband to unserved and underserved communities. The TRAI has also reiterated the reduction of charges and the model on several occasions,” Amazon said in its letter to the TRAI. Project Kuiper is a subsidiary of Amazon.
Entry barrier
Starlink said that since the spectrum for satcom will be a shared resource it should not be priced at market rates. It said that higher charges would create entry barriers for new players.
This comes after the Centre has already decided that spectrum for satellite services will not be auctioned. While telecom operators had been pushing for auction, Starlink and Amazon emerged winners with the Centre agreeing to allocate spectrum administratively. Now the next round of battle will be on pricing the spectrum. The Centre has said that it will look at maintaining the level playing field in this regard. Telecom operators including Reliance Jio have argued in favour of a market-linked pricing.
“The assignment of spectrum without auction contradicts the constitutional principles set out in the 2G judgment, especially when it involves commercial utilisation of spectrum by private entities. This could lead to the process being challenged as discriminatory and unconstitutional. The TRAI’s consultation process is flawed at its inception, as it does not align with the constitutional mandate requiring auction-based assignment for natural resources such as spectrum,” Jio said in its submission to the TRAI.
Airtel, on the other hand, has tried to take a middle ground by linking the end-use case of satcom to the pricing of spectrum. “TRAI and the government should price the satellite spectrum in a manner that addresses the concerns on level playing field with terrestrial operators qua some satellite operators offering services directly to customers in urban areas/retail customers. However, the traditional use-cases of satellite services for the traditional market i.e. in rural and remote areas and for government agencies, including defence, disaster recovery, cellular backhaul in rural and remote areas, etc., can be priced differently (say, no spectrum charge),” Airtel said. Airtel’s stance is not surprising given that its promoter Sunil Mittal has also made investments into satcom service through OneWeb.