India has proposed the allocation of spectrum for satellite internet services, entailing a licensing approach. The Telecommunications Bill, 2023, tabled in Parliament on Monday, December 12, is expected to exempt companies from competitive bidding.
This move is likely to favor Elon Musk's Starlink but presents a setback for Mukesh Ambani's Reliance Jio.
So far, the 138-year-old Indian Telegraph Act has been mandated to oversee the Indian telecommunications landscape.
- The proposed licensing approach, if approved, would also aid global players like Amazon's Project Kuiper and India-based Bharti Global's OneWeb, apart from Starlink.
- These companies have time and again advocated against traditional auctions, prevalent in India.
- Concerns about increased costs and investments prompted these foreign firms to push for a licensing model.
- Starlink, in particular, has lobbied hard for this strategy.
- "By bypassing traditional auctions, this pragmatic method is poised to expedite the deployment of satellite services more efficiently," Director General at SIA-India Anil Prakash told Reuters.
As of now, Starlink has over 5,500 satellites in the earth's lower orbits, facilitating communications, spanning over 65 countries.
Jio for auctions
- In contrast, Reliance Jio, India's largest telecom operator, had a different viewpoint.
- The company holds the view, that an auction, like the 5G spectrum distribution in India, was the right way to move.
- Their argument revolved around creating a level playing field, in the wake of foreign satellite service's arrival.
- "Foreign satellite service providers could offer voice and data services and compete with traditional telecom players, and so there must be an auction to achieve a level playing field," said Reliance.
The proposed shift in spectrum allocation methods comes at a time when India's satellite broadband service market is poised for substantial growth. According to Deloitte, the market in India is expected to reach $1.9 billion by 2030, with an annual growth rate of 36%.