DoT signals 5% AGR as satcom spectrum fee

The Department of Telecommunications (DoT) is likely to recommend increasing the usage fee for satellite spectrum to 5% of adjusted gross revenue (AGR), instead of 4% proposed by the industry regulator, officials aware of the development told ET.

If accepted by the Cabinet, the move would be a setback for satcom majors such as Elon Musk’s Starlink and Amazon Kuiper, which have been lobbying to keep the rates low.

The DoT will now send its view as part of a reference back to the Telecom Regulatory Authority of India (Trai), which will then give its suggestions, officials cited above said.


No Subsidies from DBN
Starlink, Bharti Group-backed Eutelsat OneWeb, and Jio Satellite have already got all permits to launch satcom services in India. They are waiting for spectrum allocation. And that will happen only after the pricing is decided. Amazon Kuiper is awaiting approvals.

Spectrum for both GSO and non-GSO will be given administratively, as per the provisions of the Telecommunications Act.

Trai had proposed administrative allocation of satcom spectrum for a fee pegged at 4% of AGR, with no upfront payment.

The regulator proposed an additional ₹ 500 per urban subscriber annually, saying this would incentivize the satcom firms to offer services in rural areas. The DoT has rejected that. The department has also rejected Trai’s proposal to use Digital Bharat Nidhi (DBN), or erstwhile USO fund, to subsidise satellite terminals.

Trai had recommended disbursing a subsidy from the DBN, either as a lump sum payment or in instalments, to fund satellite terminals that cost in the range of ₹20,000 to ₹50,000, in a bid to boost adoption.

DoT, however, feels there is no mechanism under DBN to directly disburse subsidies. The DoT is believed to have formed a consensus to accept the remaining proposals, in a change from its earlier stance to refer most of the recommendations back to Trai, officials said.

The Digital Communications Commission (DCC), an inter-ministerial panel, which is also the highest decision-making body of DoT, had not accepted any of the proposals given by Trai on satcom spectrum pricing in its meeting last month. But after consultations and offline discussions between DoT and Trai officials, consensus has seemed to have emerged on most proposals. Only a few of them, such as the pricing and the DBN subsidy issue, would be sent back for reconsideration, they said.

“The reference will be sent back soon to Trai. Once Trai replies, the DoT would finalise the pricing and other modalities for spectrum allocation to satcom firms,” a second official said. In addition to satellite spectrum pricing, the DoT is close to finalising rules that need to be followed by satcom firms for getting such administrative spectrum.