New Delhi: Telecom regulator TRAI on Friday recommended that satellite communication companies like Starlink pay 4 per cent of their adjusted gross revenue (AGR) as spectrum charges to the government.
Operators offering satellite-based broadband internet services in urban areas would have to shell out an additional Rs 500 per subscribers annually, TRAI said in its recommendations to the Department of Telecommunications (DoT).
No additional levy would be applicable for services in rural areas.
The levy recommended by TRAI is steeper than what satcom companies have been lobbying for.
Elon Musk’s Starlink and Amazon Inc’s subsidiary Kuiper Systems had during consultations with the TRAI urged it to keep spectrum charge below 1 per cent of adjusted gross revenue (AGR) with no other charge.
The Telecom Regulatory Authority of India (TRAI) recommended that satellite broadband spectrum be allotted for five years, which can be extended by another two years.
The satellite spectrum pricing as a percentage of AGR is for both non-geostationary satellite orbit (NGSO) and Geostationary satellite orbit (GSO) based fixed-satellite service (FSS) and mobile satellite service (MSS).
NGSO refers to satellites occupying either a low-earth orbit (LEO) or medium-earth orbit (MEO).
Unlike geostationary GSO satellites, LEO and MEO satellites do not occupy a stationary position but move in relation to the Earth.
TRAI said the 4 per cent of AGR spectrum charge would be subject to a minimum annual spectrum charge of Rs 3,500 per MHz.
AGR is used to calculate the revenue that telecom companies share with the government in the form of spectrum usage charges and license fees. AGR based spectrum charging is the existing practice for commercial VSAT service providers and BSNL.
Releasing the recommendations, TRAI chairman Anil Kumar Lahoti said satcom services once available can play a vital role in taking connectivity to underserved areas where telecom networks are not available. They also play a critical role in disasters, in rescue and relief operations.
Stating that spectrum charges should be levied as a percentage of AGR for simplification and as part of ease of doing business, TRAI said, “Overall spectrum charges do not need to be any higher than the administrative costs required to cover the allocation of spectrum. It will also facilitate investment and innovation.”
DoT will process the recommendations. It can tweek them or accept in totality and send them to the Cabinet for approval. Once approved, satellite companies can apply for licenses.
Starlink earlier this week got a Letter of Intent (LoI) for the start of its services. It now has to procure a license before starting services in India.
SpaceX, the aerospace company led by Elon Musk, has already tied up with rivals Reliance Jio and Bharti Aitel to bring Starlink’s broadband internet services to India.
Both Indian firms will offer Starlink equipment through their network and also support customer installation and activation on devices.
Airtel-backed Eutelsat Oneweb and Jio Satellite Communication have already gotten the global mobile personal communication by satellite (GMPCS) services license needed to provide satcom services in India, while Elon Musk-led Starlink is set to soon get the license.
Over the past few months, rivals Jio and Airtel had come together to demand an auction for awarding spectrum for satellite services in India. Musk on the other hand lobbied for administrative allocation as per international norm.
In October last year, the government sided with Musk on the issue of allocating airwaves, to be used for offering low latency internet services using satellite, at a pre-decided price through administrative route.
Both Jio, India’s largest wireless carrier, and Airtel, the No 2 player in the world’s most-populous nation, where data usage is rapidly rising, feared lower entry cost will chip away some of their subscriber base.
Based on the recommendations of TRAI, the DoT would now go to the Cabinet for pricing of satellite spectrum and once approved any satcom wanting to offer services in India can apply.