The Battle For Satellite Spectrum

While the market for satellite broadband currently is small, the potential is large as an estimated 30 per cent of the country does not have reliable terrestrial broadband services, reports Surajeet Das Gupta.

It has been an over two-year battle, and the question to be decided was whether to auction satellite broadband spectrum or offer it at an administrative price.

The raging debate is now settled in the proposed telecommunications (telecom) Bill submitted in Parliament, in favour of the latter.

There were four actors in the game.

OneWeb, led by Sunil Mittal, pushed for administrative allocation, locking horns with Reliance Jio, which aggressively demanded an auction as the fairest way to allocate spectrum.

The other difference of opinion was within the government and its institutions -- between the Department of Telecommunications (DoT), which wanted an auction as the preferred way.

Still, the regulator was not forthcoming and wanted a bigger consultation.

It all began in September 2021 when DoT sent a reference to the Telecom Regulatory Authority of India (Trai) for recommending appropriate frequency bands and block sizes, base price, and quantum for the auction of space-based communication services spectrum.

After many letters were exchanged asking for clarifications between the two, Trai came out with a consultation paper this year in April regarding what would be the best way -- auction, administered, or some other way to allocate spectrum -- opening up the debate once again.

Clearly, the DoT view that an auction is the best way out was endorsed by none other than Communications Minister Ashwini Vaishnaw when, in an interview responding to the contentious issue to Business Standard, he said: "Our preference is for an auction. If we can formulate a reasonable and fair auction process, why should we not go for it?

"If it is impossible to formulate it, the Bill provides for administrative allocation," the minister added.

But a strong case was made not only by OneWeb and Mittal but also the Indian Space Association (ISpA) -- which represents key satellite players -- as well as support from Tatas (Nelco), Project Kuiper (part of Amazon), and even Elon Musk's Starlink, all of whom want to provide satellite broadband services in India.

And this was evident in their replies to the Trai consultation paper.

Jio was the sole player on the other side of the fence.

Sure, while the market for satellite broadband currently is small ($10 million to $15 million), the potential is large as an estimated 30 per cent of the country does not have reliable terrestrial broadband services.

Proponents of administrative allocation say that it is a global trend, and India cannot be an outlier.

They point out that in terrestrial -- the game is different -- operators require exclusive frequencies carved out for each player in different bands and earmarked frequencies with no interference. So frequency is given on auction.

But in satellite services, the spectrum is globally shared by satellites that work mostly within a particular band, and spectrum use is already coordinated by satellite companies through a dynamic automated system on a good faith basis.

So it should be given administratively. They also argue that countries like Thailand, Mexico, and Brazil which tried auctions eventually shifted to administrative allocation.

They argue that sharing will improve the efficiency of spectrum usage and over 200 small satellite startups offering services in India, such as connectivity to fishermen at sea, will also get access to the spectrum.

Under the expensive auction route, they will have no option but to close down.

But companies like Jio opposed the move because it will create an uneven play as mobile players pay for the spectrum to offer the same service -- broadband services -- which satellite players will also offer but without any cost on the spectrum.

They also fear that early three to four entrants in satellite communications will be given the preferred orbital slots by the International Telecommunication Union on a first come, first served basis and crowd out the newer ones from the game.

Even though Trai has still not come up with its final views on the consultation process, it is clear that the government has decided to offer spectrum through the administrative route rather than DoT's preference for auction.

---

Trai sets the price tag on satellite spectrum

Having received all clearances, Reliance Jio and Airtel-backed OneWeb just require the necessary spectrum to start providing satcom services, reports Subhayan Chakraborty.

With the telecommunications (telecom) Bill allowing satellite spectrum to be administratively allocated, satellite communication (satcom) providers will have to wait at least four to five months or more for the process to start.

Having received all clearances, Reliance Jio and Airtel-backed OneWeb just require the necessary spectrum to start providing satcom services.

Sources in the know said they expect the Bill to be fully debated and passed in Parliament only by the Budget session in February.

Work on creating departmental rules for allocating satellite spectrum will begin afterwards and will take a few months, they added.

The Telecom Regulatory Authority of India, which has been headless for three months now, will also need to recommend a pricing mechanism and set a reserve price for the airwaves.

Officials at the regulator said work on the satellite spectrum will begin only after a new chairperson takes charge.

The Department of Telecommunications (DoT) has invited applications for the position twice in the past six months.

A satellite or orbit is a segment of the radio spectrum made available when satellites are placed into orbit.

A debate over whether the scarce resource should be auctioned or allocated by the government has raged on for the past few years.

Now, the telecom Bill has included satellite-based services in a list of sectors where the government has the right to administratively allocate spectrum, thereby ending the debate that had split the telecom industry.

It has named teleports, television channels, direct-to-home, digital satellite news gathering, and very small aperture terminal and mobile satellite services in L and S bands, among others, for spectrum allocation outside of auctions.

Unlike in auctions, an administrative allocation of spectrum will allow multiple operators to use a particular band.

This happens since the linear nature of satellite bands at particular locations on earth can be serviced by a satellite in orbit only when it is directly positioned above it.

As it moves past the point, another satellite belonging to a different operator may pick up the band.

As a result of these technical challenges, there are no global precedents for auctions for satellite spectrum globally, officials said.

Sources said the satellite economy currently remains a minute part of the overall telecom ecosystem and is expected to do so in the next five years despite the rapid development of technology and use cases.

But with a long list of startups in space emerging, and usage of satellite spectrum increasing, the value of the satellite industry may skyrocket.

In the case that more competition appears in the sector, the government will again review whether the auction route makes sense, and provisions for this are present in the Bill, sources said.

Administrative allocation will allow for the reduction of costs for players as they will not be required to engage in highly competitive and expensive auctions, Abhay Chattopadhyay, partner at Economic Laws Practice, said.

Indeed, for existing players, such a benefit would also mean increased competition, especially in areas where terrestrial network coverage is poor, with telecom service providers being required to invest in innovation and improvement of services to protect their business interests, he added.

Race heating up

The DoT has already granted Eutelsat OneWeb and Reliance Jio s satellite arm Jio Space the Global Mobile Personal Communications by Satellite services licence needed to offer satellite-based broadband services in India.

Jio is banking on a series of medium earth orbit satellites belonging to Luxembourg-based satellite telecom network provider SES.

Eutelsat OneWeb, which was created in September as the result of a merger between OneWeb and French satellite operator Eutelsat Communications, is banking on a combination of Geosynchronous equatorial orbit (GEO)-low earth orbit (LEO) fleet of satellites.

It believes this will combine network density and high throughput of GEO satellites with the low latency and ubiquity of LEO to offer customers global, fully integrated connectivity services.

Both companies are now facing off in the segment, with Jio successfully demonstrating its Jio SpaceFiber service at IMC, India s first satellite-based gigabit speed broadband service to previously inaccessible geographies within the country.

Meanwhile, Bharti Airtel Chairman Sunil Bharti Mittal announced that Bharti Airtel-backed Eutelsat OneWeb satcom service will be available in India soon.

Feature Presentation: Ashish Narsale/Rediff.com