Reliance Jio, Airtel Oppose 'Low' Satcom Fee, Benefiting Starlink

Telecom firms Reliance Jio and Bharti Airtel, through industry body Cellular Operators Association of India (COAI), have objected to the Department of Telecommunications’ proposal to set lower spectrum fees for satellite-based internet services.

Satellite Spectrum Fee Proposal

In May, India’s telecom regulator suggested that satellite service providers pay 4% of their annual revenue to the government. This model aligns with the approach adopted in several other countries and avoids the auction route used for mobile network spectrum.

Starlink, Elon Musk’s satellite internet venture, had earlier asked the Indian government not to auction satellite spectrum. The company argued that spectrum should be treated as a shared resource and licences should be granted directly.

Disparity in Charges

As per news reports, COAI, in a letter dated May 29, stated that traditional telecom companies end up paying around 21% more for spectrum because they acquire it through auctions. The group requested the ministry to review the pricing proposal, arguing that spectrum used for similar services should be priced comparably.

The letter also mentioned that satellite services are likely to cater to the same end users as terrestrial broadband providers, making the cost difference significant from a competitive standpoint.

Reliance Jio and Airtel Investments in 5G Spectrum

Over the past few years, Reliance and Airtel have spent close to $20 billion to secure 5G spectrum. Their concern is that satellite internet services, if given spectrum at much lower costs, could affect their business, especially as both technologies are set to offer broadband access to overlapping user bases.

Government Reviewing Recommendations

A senior government official confirmed that the telecom ministry is still reviewing the recommendations made by the regulator and is aware of the industry’s concerns. Similar feedback has been raised previously.

Licensing Process 

Telecom Minister Jyotiraditya Scindia recently stated that Starlink’s licensing process in India is almost complete. Although both Reliance and Airtel signed distribution deals for Starlink equipment earlier this year, they will be in direct competition once Starlink begins service.

Read more: From Luxury to Lifeline: The Airtel Growth Engine in India’s Telecom Boom.

Conclusion

The issue remains under review as telecom companies push for pricing parity in spectrum allocation, citing ongoing investments and fair competition.

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