Why industry prefers administrative allocation over auction for satellite internet | Features News

Features News

New Delhi: Telecom Minister Jyotiraditya Scindia has indicated that communications spectrum for satellite internet in India will be allocated administratively, as against an auction. The Telecom Regulatory Authority of India (TRAI) is yet to pass a formal regulation. The move is seen as being favourable to foreign operators such as Elon Musk-owned Starlink, with Mukesh Ambani owned Reliance Jio favouring an auction to prevent undue dominance in the market by foreign players. BSNL provides satellite internet services in India, particularly in remote regions through a collaboration with Hughes, which also has corporate customers for its satellite internet services in India.

Starlink had previously started selling plans in India even before getting regulatory clearance to operate. A number of players are vying to get into the market, with Amazon applying for a satellite communications license last year through its Kuiper constellation, and Bharti Airtel having acquired a 21 per cent stake in UK based OneWeb last year. ISRO chief S Somanath has also advocated for the rollout of satellite internet services by Indian Telecom Operators. The approach that TRAI will take according to the Telecom Minister is in line with global norms for operating satellite internet services.

The problems with spectrum allocation

The announcement by the Telecom Minister is a shift from the previous stance of the Department of Telecom, that was moving towards auctioning the spectrum on an exclusive use basis, while considering the potential requirement for intra-band sharing of the spectrum between licensees. A lack of such sharing agreements between licensees could potentially result in the inefficient use of spectrum. There is also the question of how the regulators should handle any new players that enter into the market once the spectrum has been allocated, with the options being making the operators wait for the next allocation cycle or auction, or permitting the provider to share the available spectrum with existing operators.

The regulators are also considering permitting operators to trade or lease a portion of, or the entire spectrum allocated to them. If however the spectrum is allocated on sufficiently short validity periods, such allowances for trading and leasing may not be required. The deployment of megaconstellations of small communications satellites may reach saturation, at least in terms of spectrum availability if not just the physical amount of space available in low Earth orbit. The Department of Telecom has also not yet decided on the specific bands in which the spectrum has to be allocated for satellite internet services. The TRAI has repeatedly deferred taking any concrete decisions in terms of spectrum use for satellite internet in India.

Stakeholders prefer administrative allocation

Most of the stakeholders involved prefer administrative allocation over an auction. According to the Satcom Industry Association India, “While an auction may maximize revenue, it may not always be the best way to serve the public good. An auction-based approach in the case of satellites would lead to fragmentation, and exclusive allocation to powerful players, and prevents smaller players, start-ups, and academia from accessing the necessary spectrum. There is simply no good policy reason to put satellite spectrum into the hands of limited players when that spectrum is technically capable of being used by multiple players under well-established principles of international law.”

The India Cellular and Electronics Association (ICEA) has also supported administrative allocation, “Brazil and the United States auctioned national satellite authorizations in the past but both countries have since abandoned this policy because of its negative effects on spectrum efficiency and end-user cost. Virtually all such experiments in the world have been abandoned and the practice of auctioning satellite spectrum and replacing it with the globally adopted administrative process.” NASSCOM also favours the regulatory route, “Satellite spectrum unlike terrestrial spectrum can be shared amongst multiple service providers without diminishing what is available to others. Due to its non-exclusive nature, existing well-established administrative route is the most efficient method of allocation.”

The Indian Space Association (ISpA) also believes that the administrative allocation is the best approach for encouraging an emerging industry, “TRAI, with the authority bestowed on it by the Government of India, needs to have a larger, wider, and comprehensive outlook, keeping in mind global practices of spectrum assignment as well as the technical challenges of auctioning. We are sanguine that TRAI, with a more open-minded study of the multidimensional complexities of spectrum usage in space, will allocate it by administrative methods to help the nascent space industry to grow and be globally competitive.”

According to Larsen and Toubro, “The administrative approach offers a valuable blend of certainty, security, and predictability, particularly benefiting the emerging Indian private space industry and the nation as a whole.” According to Amazon, “Auctions are typically used to assign exclusive rights of access to spectrum and to ensure that the winning bidder pays a premium to acquire that access. Here, however, the exclusive assignment of spectrum for use by satellite communications providers to a single entity would have multiple and specific negative impacts that should —and can— be avoided altogether.” The writing on the wall is clear, with most operators overwehelmingly favouring administrative allocation, with the Telecom Ministry indicating steps in the right direction.

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