Allocate or auction spectrum? Let India’s telecom policy goals settle

An auction, which is what Mukesh Ambani’s Reliance Jio wants held, is not on the agenda. This sets the record straight on the Centre’s position on a matter that has split opinion within the industry. 

Along with Amazon’s Kuiper, OneWeb-Eutelsat, a satcom player backed by Airtel’s owner, Sunil Mittal’s Bharti Group, also plans to enter this new market. 

Terrestrial service leader Jio has not ruled out taking the issue to court as a “last resort," as reported. Jio’s argument is that since satcom will compete with existing services, for which spectrum was bought at exorbitant auction prices, what sky-beamers use must also be bid for, so that incumbents are not put at a disadvantage. 

Also read: All rules on new telecom law to be notified in 180 days: minister Scindia

Musk, though, has opposed Jio’s proposal, saying that auctions would be “unprecedented," given that such spectrum must be allocated under rules of the International Telecommunication Union, a UN agency, to which India is a party. But which approach would serve us better?

As Scindia has said, India’s Telecom Act of 2023 mandates the distribution of satellite spectrum through allocation. For terrestrial services, however, the Supreme Court had ordered auctions to be conducted, after which telecom operators had to pay huge sums for it. 

What satcom debutants are seeking is also a scarce resource, so why the same telecom rules shouldn’t apply is a good question. To calm fears of satcom awards being handouts, the minister has said that charges would be levied. 

“What that cost is, and what its formula would be, would only be decided by Trai," he stated, referring to the Telecom Regulatory Authority of India, which is expected to propose satcom rules. 

What the Centre charges could shape the cost structure of orbital operators heavily enough to determine how high or low their user tariffs are. 

Since the advantage of satcom is the geographical expanse it can cover, with dishes receiving signals from the sky to transmit on the ground, there is a valid case for cheap services so that users with modest earnings in remote areas can benefit. 

Also read: Why Reliance Jio is upset over India's satellite broadband plan

Terrestrial coverage has been patchy or missing in parts that incumbents have not found viable to venture into. Low-cost allotment could help meet the goal of inclusion.

Yet, while a promising tech disruption must not be resisted, the plea for a policy of parity also has merit. Should existing players lose customers to entrants with cheaper services riding on globally defrayed costs, deep pockets and low-cost airwaves, the ensuing shake-up is sure to evoke protests. 

Perhaps a middle path could optimize the country’s aims. As Bharti’s Mittal has suggested, rural and urban zones could be treated differently. 

Whether auctions can be used is unclear, but it seems possible to levy charges (and impose conditions) in such a way that the urban playing field stays level. 

For underserved parts of India, the Centre could charge satcom players token sums to make services as widely affordable as possible. Terminals could be subsidized, too, if it serves the cause of inclusive coverage. 

Also read: Billionaire Battle: India to allocate satellite spectrum, no auction after Musk criticises Ambani’s auction push

Administrative allocations, thus, could be made in a manner that satisfies all stakeholders. To maximize the benefits of satcom, though, Trai must get its math right.