Telecom dept flags concerns over Trai’s satcom pricing plan, seeks review

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The department of telecommunications (DoT) has sent back most of the Telecom Regulatory Authority of India’s (Trai) recommendations on satellite spectrum allocation, raising concerns over key pricing proposals for providers such as Starlink, OneWeb, and Jio Satellite, sources told Moneycontrol.

A major point of contention is Trai’s proposal to impose an additional Rs 500 annual charge on urban satellite broadband subscribers. DoT has asked the regulator to reconsider the levy, citing difficulties in accurately distinguishing urban from rural customers, which could lead to compliance challenges and misuse, they said.

The department has also pushed for a higher annual minimum spectrum fee than the Rs 3,500 per MHz recommended by Trai, particularly for mobile satellite services.

These issues were taken up at the Digital Communications Commission (DCC) meeting on September 16. The commission, which includes senior DoT officials along with representatives from NITI Aayog and the finance and IT ministries, reviewed Trai’s recommendations but did not approve most of them.

In May, Trai had suggested that satellite internet firms pay 4 percent of adjusted gross revenue (AGR) as spectrum usage charges, along with a Rs 500 per-subscriber urban levy, and a floor price of Rs 3,500 per MHz annually if the AGR-linked payout fell short. The regulator argued the surcharge would encourage operators to expand into rural markets.

While DoT is broadly aligned with the 4 percent AGR levy, it wants the urban charge and the annual minimum fee reworked, saying the current design may not achieve the intended rural push.

Another recommendation sent back was Trai’s plan to subsidise satellite terminals, which cost between Rs 20,000 and Rs 50,000, using the Digital Bharat Nidhi (DBN). Trai had proposed one-time or instalment-based subsidies to drive adoption, but DoT has asked for a fresh look at the scheme.

Proposals around interference management and satellite system capacity were also flagged, with DoT insisting on subscriber limits for each system to avoid congestion.

Trai has maintained that satellite services are still nascent and do not directly compete with terrestrial networks, warranting a lighter regime that could be reviewed after five years. DoT, however, wants flexibility to revise terms earlier if technology or market conditions change.

Direct-to-mobile satellite connectivity — being developed by companies such as Elon Musk’s Starlink — is a particular concern for the department, as it could bypass levies that telecom operators currently pay, posing risks to their revenues in India.

Adding to the debate, the Cellular Operators Association of India (COAI) wrote to the government on May 29, calling Trai’s pricing recommendations “unjustifiably low, non-transparent, and unfair,” and warning that they could distort the level-playing field.

This comes days after Musk’s satellite internet venture Starlink received provisional spectrum clearance from the department of telecommunications to begin trial satellite broadband services in India, taking the company a step closer to commercial launch. With the trial spectrum in hand, Starlink will now build its ground infrastructure and conduct security compliance tests. The company plans to set up base stations at 10 locations, with Mumbai as the central hub.

Starlink has applied for an import license to bring in equipment, including landing station hardware, to set up its ground station in India and has outsourced the task of building the gateways to several companies, including Equinix.