DoT Approves 5% Spectrum Charge For Starlink, OneWeb And Jio Satellite Internet Services

The Digital Communications Commission (DCC) has recently authorized a 5% spectrum usage charge on adjusted gross revenue (AGR) for satellite internet providers like Starlink, Eutelsat OneWeb, and Jio Satellite. This decision, made at a recent DCC meeting, opens the door for these companies to boost broadband services across India. The Department of Telecommunications (DoT), the highest decision-making body, approved the charge, according to industry insiders.

Satellite internet services provided to government-designated hard-to-reach regions, including border areas, hilly locations, and islands, will be eligible for a 1% reduction in the spectrum charge. Nonetheless, commercial satellite launches will still face security approvals and other regulatory clearances.

Elon Musk's Starlink project to improve rural connectivity in India has drawn mixed reactions from netizens. Although the spectrum allocation will be managed administratively during the first five years, with the potential for a two-year extension, the government will still need to follow through with the necessary steps. This approval eliminates a significant regulatory obstacle for satellite broadband companies looking to offer commercial services in India.

However, the decision must still go through additional government approvals. The DCC's move comes after reviewing recommendations from the Telecom Regulatory Authority of India (TRAI) on spectrum allocation terms for satellite-based communication services. TRAI had proposed a 4% AGR-linked spectrum charge with a minimum annual payment of ₹3,500 per MHz. The DoT, though, rejected TRAI's suggestion of a ₹500-per-subscriber charge for urban customers, citing challenges in distinguishing between rural and urban users.

Officials emphasized that the reduced spectrum charge for remote areas is intended to motivate satellite internet providers to concentrate on regions where LEO/MEO (low-Earth orbit/medium-Earth orbit) satellites outperform traditional telecom networks. The government's goal is to incentivize satellite internet services to bridge the digital divide, focusing on underserved regions rather than solely targeting urban markets.