Key question in space-comms race: to auction or allocate?

The race is dotted with a number of high-profile entities including Bharti Airtel, which has acquired the UK-based OneWeb, Reliance Jio through its JV with Luxembourg-based SES, Tata Communications, and billionaire Elon Musk’s Starlink, among others. At stake is India’s space economy, which as per an EY-ISpA report is set to rise to $13 billion by 2025 at a CAGR of 6%.

Jio and the others are divided over how entities should be assigned spectrum for the use case. Airtel, OneWeb and Starlink among others have said that since the sector is nascent and would need a significant amount of upfront investment, it is best to allocate spectrum administratively with a nominal charge. Jio, on the other hand, is batting for an auction.

Last month, as OneWeb successfully deployed 36 satellites, Bharti Airtel chief Sunil Mittal reiterated that spectrum for satcom should not be auctioned but allotted administratively, which is the global norm.

While there is yet to be a precedent of auctioning airwaves for space communications globally, the Department of Telecommunications (DoT), it is understood, is leaning towards auctioning off the spectrum. However, before last year’s spectrum auctions, the Telecom Regulatory Authority of India (TRAI) had said that for spectrum availability in 24.25-28.5 GHz, the DoT is of the view that the auction of spectrum band 27.5-28.5 GHz, which could be used for space-communication services, may be deferred pending TRAI recommendations.

While the TRAI had sent its recommendations on auction of spectrum in respective frequency bands including 27.5-28.5 GHz as part of 24.25-28.5 GHz band, it had said, “it is for the DoT to decide whether frequency range 27.5-28.5 GHz is to be allocated/ auctioned for IMT/5G”. Ultimately, the 27.5-28.5 GHz band was not auctioned last year.

It is also worth noting that unlike terrestrial spectrum which is used for mobile communications, by its very nature, satellite spectrum has no national territorial limits and is international in character. It is therefore coordinated and managed by the UN agency, International Telecommunications Union (ITU).

In 2021, TRAI had released a consultation paper on the licensing framework for establishing satellite earth station gateways. One of the questions it had then asked stakeholders was how satellite spectrum should be assigned.

In response, OneWeb had “strongly recommended” to take the administrative allocation route and charge a fee for it “in order to promote investment and make sure competitive prices are available to the market at the end”.

OneWeb India Communications is currently 100% owned by Bharti Airtel and holds a GMPCS (global mobile personal communications by satellite services) licence given by the telecom department, which is required to roll out satellite internet services in India. OneWeb’s UK holding company has already put in an FDI application to the Indian government.

Airtel had said that the spectrum should be allocated administratively on a case by case basis.

“Typically, a LEO (low earth orbit) satellite operator may require only 2-3 GW locations across the country. Just to explain, spectrum is a requirement only for the small perimeter of the gateway landing stations and unlike terrestrial network, this is not used all over the geographical region of the country. Since this assignment of orbital /spectrum resources for satellites is globally coordinated at ITU level, and given administratively world over, the same priority and methodology should also be followed by the Indian administration,” Airtel had said in its submission.

“Given one of the primary objectives for LEO broadband is to serve the currently unconnected and underserved population, higher operation cost will lead to higher price and lower penetration. For this reason, it is proposed the spectrum is assigned be kept on a simple administrative basis,” it had added.

Jio, however, had differed. “It is critical that the tried and tested policy of auction of spectrum is persisted with for availing the spectrum that can be deployed to offer communication services to Indian citizens, irrespective of the network deployed i.e., satellite or terrestrial communication networks,” it had written in its submission.

An auction, according to Jio, will also ensure that ‘same service same rules’ and equitable policy in allocation of vital national resources are maintained so that the “existing and future investments in providing similar services by alternate technologies are not discouraged and the existing large investments by TSPs are not adversely impacted”.

Elon Musk’s Starlink had recommended that the regulatory framework imposes nominal charges (subsumed within AGR-based fees) as spectrum use charges to ensure affordable access to services. “The current formula-based pricing methods, as highlighted also by the TRAl in the past, are better suited for captive use and not for the provision of services to end-users at scale,” it had said.

Last November, TRAI said that it will take up a separate consultation process on the issue of spectrum for space-based communication services.