Satcom Players have a Big Opportunity in India, but Many things Need to Go Right

The Telecom Regulatory Authority of India (TRAI) is currently working on the policies around the satcom sector. The regulator would recommend whether satcom players would get their spectrum via an auction or through the administrative allocation route.

Highlights

  • Satellite communications (Satcom) sector is going to blow up in India in the near future.
  • The road is set, but the sector regulator would have to be very careful and deliberate about the policies it forms for the satcom players.
  • Currently, two players have the GMPCS (global mobile personal communication by satellite) license in India - OneWeb and Jio Satellite Communications Ltd.

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Satellite communications (Satcom) sector is going to blow up in India in the near future. The road is set, but the sector regulator would have to be very careful and deliberate about the policies it forms for the satcom players. Currently, two players have the GMPCS (global mobile personal communication by satellite) license in India - OneWeb and Jio Satellite Communications Ltd. OneWeb has already deployed most of its planned fleet of LEO (low earth orbit) satellites. In 2023, OneWeb is expected to complete its planned constellation of LEO satellites. A total of 502 LEO satellites have been deployed, which is 80% of the company's planned fleet.




Low Fixed Broadband Penetration in India is the Big Opportunity

Currently, the fixed-broadband connections have only be able to reach about 10% of the Indian households (via Ookla). This means that there's still a very large part of India unexposed to broadband internet. Mobile networks are largely unreliable in India because of network congestion scenarios. Laying fibre is an expensive procedure and fibre can be easily damaged due to regular diggings, resulting in interrupted internet services. However, these limitations don't exist with the satellite broadband.

While Starlink tried selling pre-booking connections in India, the company was asked to refund the money to customers and stop selling pre-bookings as it didn't have a license to sell services yet. There have been no updates from Starlink since then. Maybe the company has put its plans to sell connections in India on hold. India is too big of a market for any company to miss out on, thus, it can't be that Starlink isn't planning something for India at all. But the company would have faced a big set back when its India head Sanjay Bhargava left the company.

TRAI is Currently Working on the Policies

The Telecom Regulatory Authority of India (TRAI) is currently working on the policies around the satcom sector. The regulator would recommend whether satcom players would get their spectrum via an auction or through the administrative allocation route. What's worth noting here is that while an auction process keeps things transparent and fair, it is not something that has been adopted by any other nation.

Telecom players, for fair reasons want the auction to take place. However, satcom players have warned that if the an auction route is taken, it would hamper their investments in India. Satcom players can work with sharing spectrum resources and don't require dedicated spectrum like the mobile operators do. An auction could mean that the spectrum would be segmented and its efficiency will go down for the satcom players.

It would be interesting to see the side that TRAI takes here. Both the mobile telecom players and satcom players look correct in their places. Hence, TRAI will have to find a middle ground here to keep both happy.

The presence of satcom players in India would be crucial for telecom companies as well. The government has allowed the telecom players to take help of the satcom players for backhaul, which would make a big difference in their 5G rollout.

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