Satellite Internet Firms to Pay 5% of AGR
India has moved closer to opening the door for large-scale satellite internet services, with the Digital Communications Commission (DCC) approving a 5% spectrum usage charge linked to adjusted gross revenue (AGR) for satellite communication providers.
The decision covers major players including Starlink, Eutelsat OneWeb and Jio Satellite, according to officials and industry executives familiar with the decision.
The approval removes a major regulatory uncertainty for companies preparing to launch commercial satellite broadband services in India.
1% Discount for Hard-to-Reach Areas
The DCC has also approved a one-percentage-point reduction for operators that serve users in government-notified hard-to-connect areas.
These could include border regions, hilly areas and islands, where traditional terrestrial telecom networks can be difficult or expensive to deploy.
Under the proposed structure, qualifying services could therefore face a spectrum charge of 4% of AGR instead of the standard 5%.
The government wants the incentive to encourage satellite operators to serve locations where satellite connectivity has a stronger advantage over conventional mobile networks.
Spectrum Will Be Assigned Without Auction
Unlike conventional telecom spectrum, the satellite spectrum will be administratively assigned rather than auctioned.
The assignment will initially be valid for five years, with an option to extend it by another two years.
However, commercial launches will still require security and other regulatory clearances. The DCC’s decision also needs to go through the remaining government approval process before the framework is fully implemented.
TRAI Had Recommended 4%
The decision differs from the earlier recommendation of the Telecom Regulatory Authority of India (TRAI).
TRAI had proposed a 4% AGR-linked spectrum charge, along with a minimum annual charge of ₹3,500 per MHz. It had also recommended a ₹500 annual charge per subscriber in urban areas to discourage satellite providers from concentrating primarily on cities.
The DoT has rejected the urban per-subscriber charge, arguing that distinguishing between rural and urban users could create implementation difficulties.
Separate 8% Licence Fee
Satellite communication operators will also have to pay an 8% licence fee on AGR under the existing authorisation framework.
That means the overall revenue-linked government charges could become significant, even though satellite operators will not have to compete in an auction for spectrum.
Industry observers have also raised concerns about whether satellite broadband will be affordable for ordinary consumers, given the relatively high cost of satellite connectivity.
A Major Step for Starlink and Jio
The regulatory decision is particularly important for companies such as Starlink, OneWeb and Jio Satellite as they prepare to compete in India’s broadband market.
Satellite services could help extend internet connectivity to remote locations where laying fibre or building dense mobile networks is commercially difficult.
For India, the challenge will be balancing affordable satellite connectivity, government revenue, rural coverage and fair competition with traditional telecom operators.
Summary: India has approved a 5% AGR-linked spectrum charge for satellite internet providers including Starlink, OneWeb and Jio Satellite, with a 1% discount for services in designated hard-to-connect areas. Satellite spectrum will be administratively assigned for five years, extendable by two years. The decision clears a major regulatory hurdle for satellite broadband, although further approvals remain.
